Alphabet Company, which uses the periodic inventory method, purchases different

Question

Alphabet Company, which uses the periodic inventory method, purchases different letters for resale. Alphabet had no beginning inventory. It purchased A thru G in January at $10.50 per letter. In February, it purchased H thru L at $12.50 per letter. It purchased M thru R in March at $13.50 per letter. It sold A, D, E, H, J and N in October. There were no additional purchases or sales during the remainder of the year. If Alphabet Company uses the LIFO method, what is the cost of its ending inventory? $174 $81 $63 $136

Explanation / Answer

A through G = 7 letters = 7 x10.5 = 73.5

H through L = 5 leters = 5 x 12.5 = 62.5

M through R = 6 letters = 6x13.5 = 81

Sold 6 letters (LIFO) = 6 x 13.5 = 81

Cost of Ending Inventory = 73.5+62.5 = $136

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.