Chase Company uses the perpetual inventory method. The inventory records for Chase reflected the following information: Assuming Chase uses a FIFO cost flow method, what is the ending inventory on January 31?
A)$345
B)$340
C)$330
D)$1,020

Question

Chase Company uses the perpetual inventory method. The inventory records for Chase reflected the following information:  Assuming Chase uses a FIFO cost flow method, what is the ending inventory on January 31?
A)$345 
B)$340 
C)$330 
D)$1,020

Quizplus · Accepted Answer

Using FIFO, we assume the first items purchased were also the first items sold, leaving the items purchased most recently as the remaining inventory. 
So, the ending inventory on January 31 would be calculated as:
6 units at $55 = $330.

Chase Company Uses the Perpetual Inventory Method