A company purchased 100 units for $30 each on 31 January.It purchased 130 units for $39 each on 28 February.It sold a total of 160 units for $45 each from 1 March to 31 December.What is the amount of ending inventory on 31 December if the company uses the first-in,first-out (FIFO)inventory costing method? (Assume that the company uses a perpetual inventory system. )

Question

Quizplus · Accepted Answer

Under FIFO, the first units purchased are the first to be sold. The company sold 160 units, so 100 units from January and 60 units from February were sold. The ending inventory consists of the remaining 70 units from February, valued at $39 each, totaling $2730.

A Company Purchased 100 Units for $30 Each on 31