Question

The annual inventory of The Bike Shop Inc. shows the following information for mountain bikes: DATE QUANTITY COST TOTAL January 15 Beginning Inventory 80 $126 $10,080 March 20 Purchase 30 120 3,600 June 21 Purchase 20 126 2,520 October 12 Purchase 15 122 1,830 December 29 Purchase 10 122 1,220 Total available for sale 155 $19,250 If 36 mountain bikes were on hand on December 31, what is the value of the ending inventory using the LIFO method of inventory pricing

Answer 1

$4,536

Step-by-step explanation:

LIFO assumes that the units to arrive last will be sold first. Hence inventory valuation is based on the prices of earlier units.

Ending Inventory = 36 x $126 = $4,536

The value of the ending inventory using the LIFO method of inventory pricing is $4,536.