Adam Inc.uses a perpetual inventory system. Jan.
$\begin{array}{rlr}
1 & \text { On hand, } 10 \text { units at } \$ 2 \text { each } & \$ 20 \
4 & \text { Sold } 8 \text { units for } \$ 10 \text { each } & 80 \
22 & \text { Purchased } 50 \text { units at } \$ 4 \text { each } & 200 \
26 & \text { Sold } 48 \text { units for } \$ 10 \text { each } & 480
\end{array}$ If Adam uses the FIFO method, how much is ending inventory on January 31?
A) $ 12
B) $ 16
C) $ 40
D) $ 8

Question

Adam Inc.uses a perpetual inventory system. Jan. 
$\begin{array}{rlr}
1 & \text { On hand, } 10 \text { units at } \$ 2 \text { each } & \$ 20 \
4 & \text { Sold } 8 \text { units for } \$ 10 \text { each } & 80 \
22 & \text { Purchased } 50 \text { units at } \$ 4 \text { each } & 200 \
26 & \text { Sold } 48 \text { units for } \$ 10 \text { each } & 480
\end{array}$ If Adam uses the FIFO method, how much is ending inventory on January 31?
A) $ 12
B) $ 16
C) $ 40
D) $ 8

Quizplus · Accepted Answer

Under FIFO, the first units purchased are the first to be sold. After selling 56 units (8 + 48), 4 units remain from the January 22 purchase at $4 each, totaling $16.

Adam IncUses a Perpetual Inventory System If Adam Uses the FIFO Method, How Much Is Ending