The Siempre Store has the following data for inventory:
Cost
Retail
Inventory, March 1
$220,000
$320,000
Purchases for March
340,000
800,000
Sales for March
493,800
The store uses the LIFO retail method. Round all ratios to four decimal places. What is the cost of the ending inventory at March 31?
A) $306,200
B) $626,200
C) $266,135
D) $350,135
Answer: D
Explanation: D)
Cost
Retail
Inventory, March 1
$220,000
$320,000
Purchases for March
340,000
800,000
Sales for March
(493,800)
Ending Inventory
$626,200
Cost
Retail
Beginning inventory
$320,000
$220,000
New layer: ($626,200 - $320,000)
$306,200
Cost of new layer: $306,200 × 42.5%
$130,135
Total
$350,135
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