Thorin Corp. began operations in 2017. It is a merchandiser of a single item - Product Q and uses the Periodic Inventory method. The following relates to purchases of Product Q during 2017: Date Units Cost Per Unit Total Cost 1/02/17 400 $12 $4,800 1/16/17 300 $20 $6,000 3/18/17 600 $24 $14,400 6/25/17 300 $28 $8,400 10/16/17 300 $32 $9,600 12/16/17 100 $36 $3,600 Goods available for sale 2,000 $46,800 At 12/31/17, a physical inventory indicted 420 units of Product Q on hand. Assuming the LIFO method, cost of goods sold should be reported in the 12/31/17 income statement at:.
a. $33,040
b. $36,972
c. $41,200
d. $41,760

Thorin Corp.

Assuming the LIFO method, cost of goods sold should be reported in the 12/31/17 income statement at:.

= $41,600

Explanation:

a) Data and Calculations:

Date           Units     Cost Per Unit          Total Cost

1/02/17       400               $12                       $4,800

1/16/17        300               $20                     $6,000

3/18/17       600               $24                    $14,400

6/25/17      300               $28                     $8,400

10/16/17      300               $32                    $9,600

12/16/17      100               $36                     $3,600

12/31/17  2,000 Units available for sale $46,800

12/31/17  (1,580) Sales

12/31/17     420 Ending Inventory

Goods available for sale 2,000 $46,800

Ending Inventory is estimated to be =

1/02/17       400     $12     $4,800

1/16/17          20     $20       $400

Total          420                $5,200

Cost of goods sold = Cost of goods available for sale minus the estimated cost of Ending inventory = $46,800 - $5,200 = $41,600

b) Unfortunately, the dates of sales were not indicated, to enable the exact determination of the cost of goods sold under the LIFO method.

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