A Company Had 14 Units of Inventory at a Cost

question 179

Multiple Choice

A company had 14 units of inventory at a cost of $18 each on July 1. On July 3, the company purchased 19 units at $19 each. On July 7, the company purchased 15 units at $20 each. On July 9, the company sold 36 units for $63 each. Given this information, determine the cost of the 12 units remaining in inventory after the July 9 sale using the LIFO periodic inventory method.

• A)$673.
• B)$697.
• C)$228.
• D)$240.
• E)$216.

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Definitions:

Intra-entity Gross Profits

Profits realized from transactions conducted within the same legal entity, often requiring elimination for accurate consolidated financial reporting.

Equity Method

An accounting technique used by firms to assess the profits earned by their investments in other companies, by recording profits proportional to their ownership percentage.

Inventory

Assets held for sale in the ordinary course of business, in the process of production for such sale, or in the form of materials or supplies to be consumed in the production process or in rendering services.

Journal Entry

A record in accounting that notes the debit and credit transactions affecting the financial statements of a business.