Samson Company had the following balances and transactions during 2019: $$\begin{array} { | l | l | }
\hline\begin{array} { l }
\text { Beginning Merchandise } \
\text { Inventory }
\end{array} & 20 \text { units at } \$ 94 \
\hline \text { March 10 } & \text { Sold 17 units } \
\hline & \text { Purchased 60 units at } \
\text { June 10 } & \$ 100 \
\hline \text { October 30 } & \text { Sold 54 units } \
\hline
\end{array}$$ What is the balance of the company's Merchandise Inventory,as disclosed in the December 31,2019 balance sheet as per the periodic FIFO inventory costing method?

Question

Samson Company had the following balances and transactions during 2019: $$\begin{array} { | l | l | } 
\hline\begin{array} { l }  
\text { Beginning Merchandise } \
\text { Inventory }
\end{array} & 20 \text { units at } \$ 94 \
\hline \text { March 10 } & \text { Sold 17 units } \
\hline & \text { Purchased 60 units at } \
\text { June 10 } & \$ 100 \
\hline \text { October 30 } & \text { Sold 54 units } \
\hline
\end{array}$$ What is the balance of the company's Merchandise Inventory,as disclosed in the December 31,2019 balance sheet as per the periodic FIFO inventory costing method?

Quizplus · Accepted Answer

Under the periodic FIFO (First-In, First-Out) inventory costing method, the earliest (oldest) costs are assigned to the cost of goods sold (COGS), and the most recent costs remain in ending inventory. Here's the calculation:1. Beginning inventory: 20 units at $94 = $1,8802. Purchase on June 10: 60 units at $100 = $6,000Total units available for sale = 20 + 60 = 80 unitsTotal cost of units available for sale = $1,880 + $6,000 = $7,8803. Sold on March 10: 17 units (from beginning inventory)4. Sold on October 30: 54 unitsTotal units sold = 17 + 54 = 71 unitsUnits remaining in ending inventory = 80 - 71 = 9 unitsSince we are using FIFO, the ending inventory consists of the most recent purchases. Therefore, all 9 units in ending inventory are from the June 10 purchase at $100 each.Ending inventory value = 9 units * $100 = $900

Samson Company Had the Following Balances and Transactions During 2019