Rodriguez Company had the following balances and transactions during 2016: $$\begin{array} { | l | l | }
\hline \text { Beginning inventory } & 300 \text { units at } \$ 82 \
\hline 10 \text { March } & \text { Sold } 60 \text { units } \
\hline 10 \text { June } & \text { Purchased } 600 \text { units at } \$ 84 \
\hline 30 \text { October } & \text { Sold } 360 \text { units } \
\hline
\end{array}$$ What would the ending inventory amount be as reported on the balance sheet at 31 December 2016 if the perpetual first-in,first-out costing method is used?

Question

Rodriguez Company had the following balances and transactions during 2016: $$\begin{array} { | l | l | } 
\hline \text { Beginning inventory } & 300 \text { units at } \$ 82 \
\hline 10 \text { March } & \text { Sold } 60 \text { units } \
\hline 10 \text { June } & \text { Purchased } 600 \text { units at } \$ 84 \
\hline 30 \text { October } & \text { Sold } 360 \text { units } \
\hline
\end{array}$$ What would the ending inventory amount be as reported on the balance sheet at 31 December 2016 if the perpetual first-in,first-out costing method is used?

Quizplus · Accepted Answer

Under FIFO, the oldest inventory costs are used up first. After selling 60 units from the beginning inventory, 240 units remain. Then, 360 units are sold from the June purchase, leaving 240 units. The ending inventory is 240 units at $84 each, totaling $20,160.

Rodriguez Company Had the Following Balances and Transactions During 2016