Poole Company purchased two identical inventory items. One of the items, purchased in January, cost $4.50. The other, purchased in February, cost $4.75. One of the items was sold in March at a selling price of $7.50. Assuming that Poole uses a LIFO cost flow, which of the following statements is correct?
A) The balance in ending inventory would be $4.75.
B) The amount of gross margin would be $2.75.
C) The amount of ending inventory would be $4.625.
D) The amount of cost of goods sold would be $4.50.

Question

Quizplus · Accepted Answer

$7.50 sales - $4.75 cost of goods sold = $2.75 gross margin

Poole Company Purchased Two Identical Inventory Items