Jameson Company had the following balances and transactions during? 2019: Beginn
ID: 2508384 • Letter: J
Question
Jameson Company had the following balances and transactions during? 2019:
Beginning Merchandise Inventory as of January? 1, 2019
160 units at $72
March 10
Sold 80 units
June 10
Purchased 100 units at $79
October 30
Sold 100 units
What would be reported for Cost of Goods Sold on the income statement for the year ending December? 31, 2019 if the perpetual inventory system and the
Lastminus??in, first?out inventory costing method are? used?
A.
$5,760
B.
$12,960
C.
$13,660
D.
$7,900
Beginning Merchandise Inventory as of January? 1, 2019
160 units at $72
March 10
Sold 80 units
June 10
Purchased 100 units at $79
October 30
Sold 100 units
Explanation / Answer
Under LIFO method, latest Inventory purchased is issued first to sales and closing inventory is from units remaining after issue of inventory
80 units sold on March 10 will be issued from Beginning Merchandise Inventory as of January? 1, 2019
So, cost of goods sold out of Beginning Merchandise Inventory as of January? 1, 2019
= 80 x $72
= $ 5,760 --------------- (1)
100 units sold on October 30 will be issued from June 10 purchases
So, cost of goods sold
= 100 x $79
= $ 7,900---------------(2)
So, total cost of goods sold
= (1) + (2)
= $ 5,760 + $7,900
= $13,660
So, as per above calculations, option C is the correct option
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