Priscilla has the following inventory information.

July 1 Beginning Inventory 20 units at $19 $380
7 Purchases 70 units at $20 1,400
22 Purchases 10 units at $23 230
$2,010

A physical count of merchandise inventory on July 31 reveals that there are 35 units on hand. Using LIFO inventory method, the amount allocated to cost of goods sold for July is:

a. 1,430.
b. $1,380.
c .$1,390.
d. $1,407.

$1,330

Explanation:

According to the LIFO method, the last inventory in should be the first out. That is, the units purchased at the 22nd should be the first sold, followed by the ones purchased at the 7th and then by the beginning inventory on July 1st.

The number of units sold during July is:

Using LIFO, the amount allocated to those goods should come from 10 units at $23 and 55 units at $20:

Therefore, the amount allocated to cost of goods sold for July is $1,330.

None of the alternatives provided are correct.