Question

Rally Wheels Company had the following balances and transactions during 2018 Beginning Merchandise Inventory as of January 1, 2018 March 10 180 units at $73 Sold 60 units June 10 Purchased 540 units at $78 October 30 Sold 150 units What would the company's ending merchandise inventory cost be on December 31, 2018 if the perpetual inventory system and the last-in, first-out inventory costing method are used? O A. $55,260 O B. $16,080 O C. $42,120 D. $39,180

Answer 1

	Available for sale			Cost of goods sold			Ending inventory
Date	Description	Units	Unit cost	Units	Unit cost	Total cost	Units	Unit cost	Total cost
Jan. 1	Beginning inventory						180	73	13,140
March 10	Sale			60	73	4,380	120	73	8,760
June 10		540	78				120	73	8,760
							540	78	42,120
Oct. 30	sale			150	78	11,700	120	73	8,760
							390	78	30,420

Cost of ending inventory = 8,760 + 30,420

= $39,180

Correction option is (D)

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