Table 6-6 Sam's Wholesale Bikes $\begin{array} { | l | l | }
\hline \text { January } 1 \text { inventory balance } & 15 \text { units at } \$ 350 \text { per unit } \
\hline \text { January } 4 \text { purchase } & 50 \text { units at } \$ 375 \text { per unit } \
\hline \text { January } 15 \text { sale } & 40 \text { units at } \$ 550 \text { per unit } \
\hline \text { February } 8 \text { purchase } & 80 \text { units at } \$ 405 \text { per unit } \
\hline \text { February } 15 \text { sale } & 70 \text { units at } \$ 550 \text { per unit } \
\hline
\end{array}$
-Refer to Table 6-6. What is the value of the February ending inventory assuming that Sam's uses the periodic FIFO inventory method?

Question

Table 6-6 Sam's Wholesale Bikes $\begin{array} { | l | l | } 
\hline  \text { January } 1 \text { inventory balance } & 15 \text { units at } \$ 350 \text { per unit } \
\hline \text { January } 4 \text { purchase } & 50 \text { units at } \$ 375 \text { per unit } \
\hline \text { January } 15 \text { sale } & 40 \text { units at } \$ 550 \text { per unit } \
\hline \text { February } 8 \text { purchase } & 80 \text { units at } \$ 405 \text { per unit } \
\hline \text { February } 15 \text { sale } & 70 \text { units at } \$ 550 \text { per unit } \
\hline
\end{array}$
-Refer to Table 6-6. What is the value of the February ending inventory assuming that Sam's uses the periodic FIFO inventory method?

Quizplus · Accepted Answer

The periodic FIFO inventory method assumes that the first units purchased are the first units sold. Therefore, the ending inventory consists of the units purchased on February 8th. The value of the ending inventory is 80 units x $405 per unit = $32,400. However, since the company sold 70 units in February, the ending inventory is only 10 units. Therefore, the value of the February ending inventory is 10 units x $405 per unit = $4,050.

Table 6-6 Sam's Wholesale Bikes -Refer to Table 6-6