A company's inventory records report the following: $$\begin{array} { | l | l | l | }
\hline \text { August 1 } & \text { Beginning balance } & 15 \text { units } @ \$ 12 \
\hline \text { August } 5 & \text { Purchase } & 10 \text { units } @ \$ 13 \
\hline \text { August } 12 & \text { Purchase } & 20 \text { units } @ \$ 14 \
\hline
\end{array}$$ On August 15, it sold 30 units. Using the FIFO perpetual inventory method, what is the value of the inventory at August 15 after the sale?
A)$140
B)$590
C)$380
D)$160
E)$210

Question

A company's inventory records report the following: $$\begin{array} { | l | l | l | } 
\hline \text { August 1 } & \text { Beginning balance } & 15 \text { units } @ \$ 12 \
\hline \text { August } 5 & \text { Purchase } & 10 \text { units } @ \$ 13 \
\hline \text { August } 12 & \text { Purchase } & 20 \text { units } @ \$ 14 \
\hline
\end{array}$$ On August 15, it sold 30 units. Using the FIFO perpetual inventory method, what is the value of the inventory at August 15 after the sale?
A)$140
B)$590
C)$380
D)$160
E)$210

Quizplus · Accepted Answer

Under FIFO, the first units purchased are the first to be sold. The sale of 30 units on August 15 would consist of 15 units from the beginning balance at $12 each and 15 units from the August 5 purchase at $13 each. The remaining inventory would be 5 units from the August 5 purchase at $13 each and 20 units from the August 12 purchase at $14 each, totaling $210.

A Company's Inventory Records Report the Following On August 15, It Sold 30 Units