What is the cost of goods sold under LIFO?

Question

Use the following information to answer the question below.

Beggining Inventory 100 Units@ $8.00
Purchase-May 200 Units@ $6.00
Purchase-July 100 Units@ $12.00

A periodic inventory system is used; ending inventory is 150 units.

What is the cost of goods sold under LIFO?

Answer 1

LIFO = Last In, First Out.

You take the cost of goods from the most recent purchases.

Cost of Goods sold:
100 July Units @ 12.00 = $1,200
150 May Units @ $6.00 = $ 900

Total COGS = $2,100.

Your remaining inventory is valued at:
100 Beginning Units @ $8
50 May Units @ $6