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May Corp

Accounting

May Corp. sells one product and uses a LIFO methoD. The beginning inventory consisted of 20 units that cost $18 per unit. During the current month, the company purchased 60 units at $20 each. Sales during the month totaled 45 units for $30 each. What is the gross income for the month?

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Computation of Gross Income for the Month:

Gross Income = Sales - Cost of Goods Sold 

Here,

Sales = 45 units * $30 = $1,350

Cost of Goods Sold for 45 units = 45 * $20 = $900 (valuation based on the purchased of 60 units at $20)

 

Gross Income = $1,350 - $900 = $450
 

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