4. Sylvia\'s Designs Co. had the following inventory activity during April: Unit

Question

4. Sylvia's Designs Co. had the following inventory activity during April:

Units

Unit

Cost

Beginning inventory

100

$10

Purchase (April 3)

50

12

Sale (April 10)

80

Purchase (April 18)

40

14

Purchase (April 23)

60

15

Sale (April 28)

120

Assuming Sylvia's uses a perpetual LIFO cost flow assumption, ending inventory for April would be

a.

$ 750

b.

$2,560

c.

$ 500

d.

$2,310

Units

Unit

Cost

Beginning inventory

100

$10

Purchase (April 3)

50

12

Sale (April 10)

80

Purchase (April 18)

40

14

Purchase (April 23)

60

15

Sale (April 28)

120

Explanation / Answer

Answer: Correct Answer is (c) $500

Stock statement onLIFO basis Purchase Sales Inventory Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Beg Inv            100 $10.00 $1,000 03-04              50 $12.00 $600.00            100 $10.00 $1,000               50 $12.00 $600.00 10-04             50 $12.00 $600.00             30 $10.00 $300.00               70 $10.00 $700.00 18-04              40 $14.00 $560.00               70 $10.00 $700.00               40 $14.00 $560.00 23-Apr              60 $15.00 $900.00               70 $10.00 $700.00               40 $14.00 $560.00               60 $15.00 $900.00 28-Apr 60 $15.00 $900.00 40 $14.00 $560.00 20 $10.00 $200.00               50 $10.00 $500.00            150                      200           120         1,660               50 $500.00

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