McCarthy Company has inventory of 8 units at a cost of $200 each on October 1. On October 2, it purchased 20 units at $205 each. 11 units are sold on October 4.
-Using the FIFO perpetual inventory method, what is the value of inventory after the October 4 sale?
A) $3,485.
B) $3,445.
C) $3,461.
D) $3,472.
E) $3,500.

Question

McCarthy Company has inventory of 8 units at a cost of $200 each on October 1. On October 2, it purchased 20 units at $205 each. 11 units are sold on October 4. 
-Using the FIFO perpetual inventory method, what is the value of inventory after the October 4 sale?
A) $3,485.
B) $3,445.
C) $3,461.
D) $3,472.
E) $3,500.

Quizplus · Accepted Answer

Under FIFO, the first 8 units sold are from the October 1 inventory at $200 each, and the remaining 3 units sold are from the October 2 purchase at $205 each. The remaining inventory is 17 units from the October 2 purchase at $205 each, totaling $3,485.

McCarthy Company Has Inventory of 8 Units at a Cost