Use the following information to answer the following questions.
The Boxwood Company sells blankets for $60 each.The following was taken from the inventory records during May.The company had no beginning inventory on May 1.

Assuming that the company uses the perpetual inventory system,determine the Gross Profit for the month of May using the LIFO cost method.
A)$348
B)$452
C)$444
D)$356

Question

Use the following information to answer the following questions.
The Boxwood Company sells blankets for $60 each.The following was taken from the inventory records during May.The company had no beginning inventory on May 1.

Assuming that the company uses the perpetual inventory system,determine the Gross Profit for the month of May using the LIFO cost method.
A)$348 
B)$452 
C)$444 
D)$356

Quizplus · Accepted Answer

Using the LIFO method, the cost of goods sold is calculated as follows:
- On May 18, 10 blankets were sold, costing $42 each (the most recent purchase). Cost of goods sold = 10 * $42 = $420.
- On May 23, 5 blankets were sold, costing $36 each (the second most recent purchase). Cost of goods sold = 5 * $36 = $180.
Total cost of goods sold = $420 + $180 = $600.
Revenue for the month = 11 * $60 = $660.
Gross Profit = Revenue - Cost of Goods Sold = $660 - $600 = $60.
Therefore, the correct answer is C.

Use the Following Information to Answer the Following Questions