Hefty Company wants to know the effect of different inventory methods on financial statements. Given below is information about beginning inventory and purchases for the current year.
January 2 Beginning Inventory: 500 units at $3.00April 7 Purchased : 1,100 units at $3.20
June 30 Purchased : 400 units at $4.00
December 7 Purchased : 1,600 units at $4.40
Sales during the year were 2,700 units at $5.00. If Hefty used the periodic LIFO method,
cost of goods sold would be:
a. $2,780
b. $3,960
c. $9,700
d. $10,880
e. $10,000
Answer: D
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