The Following Lots of a Particular Commodity Were Available for Sale

question 116

Multiple Choice

The following lots of a particular commodity were available for sale during the year:

The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year.What is the amount of inventory at the end of the year according to the LIFO method?

• A)$655
• B)$620
• C)$690
• D)$659

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Definitions:

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated by adding purchases to beginning inventory and subtracting cost of goods sold.

Hammers

Tools consisting of a weighted "head" fixed to a long handle, used for driving nails into, or pulling them out of, a surface.

LIFO Method

An inventory valuation method that assumes the last items placed in inventory are the first sold during an accounting period; LIFO stands for Last-In, First-Out.

Ending Inventory

The value of goods available for sale at the end of an accounting period, after accounting for sales and additions during the period.