Diligent Ltd had 5 units of the commodity Algo on hand at 1 September 2016.The following purchases and sales were made during September:
-What was the value of cost of goods sold of Algo,using the LIFO assumption in a perpetual inventory system?
A) $2600
B) $2700
C) $2720
D) $1400

Question

Diligent Ltd had 5 units of the commodity Algo on hand at 1 September 2016.The following purchases and sales were made during September:  
-What was the value of cost of goods sold of Algo,using the LIFO assumption in a perpetual inventory system?
A) $2600 
B) $2700 
C) $2720 
D) $1400

Quizplus · Accepted Answer

Using the LIFO assumption, the most recent purchases are assumed to be sold first. Therefore, the cost of goods sold is calculated using the cost of the most recent purchases. In this case, the most recent purchases were made at a cost of $1400.

Diligent Ltd Had 5 Units of the Commodity Algo on Hand