The following lots of a particular commodity were available for sale during the year: The firm uses the periodic system and there are 25 units of the commodity on hand at the end of the year.
What is the amount of the inventory at the end of the year using the LIFO method?
A) $1,685
B) $1,575
C) $1,805
D) $3,815

Question

The following lots of a particular commodity were available for sale during the year:  The firm uses the periodic system and there are 25 units of the commodity on hand at the end of the year.
What is the amount of the inventory at the end of the year using the LIFO method?
A) $1,685 
B) $1,575 
C) $1,805 
D) $3,815

Quizplus · Accepted Answer

Using LIFO method, we assume that the most recent purchases are sold first. Therefore, we start by using the cost of the latest purchases to value the closing inventory. The inventory at the end of the year would be valued at:
(20 units at $85) + (5 units at $70) = $1,575.

The Following Lots of a Particular Commodity Were Available for Sale