Exhibit 7-3 Davis Co. had the following inventory activity during April:
-Refer to Exhibit 7-3. Assuming Davis uses a periodic LIFO cost flow assumption, ending inventory at April 30 would be
A) $880
B) $920
C) $1,090
D) $1,890

Question

Exhibit 7-3 Davis Co. had the following inventory activity during April:  
-Refer to Exhibit 7-3. Assuming Davis uses a periodic LIFO cost flow assumption, ending inventory at April 30 would be
A) $880 
B) $920 
C) $1,090 
D) $1,890

Quizplus · Accepted Answer

Under periodic LIFO, the cost of goods sold is calculated as if the last units purchased were the first ones sold, and the ending inventory is based on the cost of the oldest units available. Therefore, the cost of goods sold for all 60 units would be $1,890 ($10x50 + $11x10), and the ending inventory would be valued at the cost of the remaining 20 units, which were purchased at $11 each, for a total of $220. Hence, the answer is $920.