The Inventory Record for a Particular Item for Year 2

question 90

Multiple Choice

The inventory record for a particular item for Year 2 appears below.
$\begin{array}{|l|l|l|l|}\hline \text { Inventory, January 1, Year 2 } & 20,000 & \$ 0.20 & \$ 4,000 \\\hline \text { Purchases: } & & & \\\hline \text { March 2 } & 4,000 & .24 & \$ 960 \\\hline \text { April 30 } & 3,000 & .28 & 840 \\\hline \text { June 15 } & 6,000 & .32 & 1,920 \\\hline \text { September 30 } & 2,000 & .26 & 520 \\\hline \text { December } 15 & 1.000 & .20 & 200 \\\hline \text { Total purchases } & 16.000 & & \$ 4,440 \\\hline \text { Total available for sale } & 36,000 & & \$ 8,440 \\\hline \text { Units sold } & 28,000 & & \\\hline\end{array}$ Refer to the Inventory Record example.The cost of goods sold for year 2 under LIFO is:

• A)$6,120
• B)$6,320
• C)$6,520
• D)$6,840
• E)$6,940

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Definitions:

Reorganization

A process aimed at restructuring a company's financial or operational aspects for efficiency or to facilitate a smoother operation.

Prepaid Expense

An expense paid in advance and recorded as an asset until it is used or consumed.

Bankruptcy Trustee

An appointed individual or entity that oversees and administers the estate of a debtor in a bankruptcy proceeding.