Use the following information for questions .
-What should be the inventory reported on Queen's July 31 statement of financial position using the FIFO inventory method?

Question

Use the following information for questions . 
-What should be the inventory reported on Queen's July 31 statement of financial position using the FIFO inventory method?

Quizplus · Accepted Answer

The total value of inventory using the FIFO method would be calculated as follows:
- The 600 units purchased on 1 July would be sold before any units from the 10 July purchase, leaving 400 units on hand at the end of July.
- Of the 1,000 units purchased on 10 July, 600 would remain on hand at the end of July.
- Finally, of the 500 units purchased on 20 July, all would be on hand at the end of July.
Using the FIFO method, we would value the 400 units on hand from the 1 July purchase at £90 each (£36,000), the 600 units on hand from the 10 July purchase at £96 each (£57,600), and the 500 units on hand from the 20 July purchase at £100 each (£50,000). The total value of inventory reported on Queen's July 31 statement of financial position using the FIFO method would be £143,600.

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