Rodriguez Company had the following balances and transactions during 2015: What would the Ending Merchandise Inventory amount be as reported on the balance sheet at December 31, 2015 if the perpetual first-in, first-out costing method is used?

Question

Rodriguez Company had the following balances and transactions during 2015:  What would the Ending Merchandise Inventory amount be as reported on the balance sheet at December 31, 2015 if the perpetual first-in, first-out costing method is used?

Quizplus · Accepted Answer

To calculate the ending merchandise inventory under the perpetual FIFO method, we need to start with the earliest inventory costs and work our way up to the most recent costs. Using the amounts given in the table, we can calculate the cost of goods sold:

Beginning inventory: $5,000
Purchases:
- January 12: $3,000
- March 3: $2,500
- May 5: $4,000
- August 10: $1,800
Total purchases: $11,300
Cost of goods available for sale: $16,300
Ending inventory (perpetual FIFO): 
- 100 units x $80 (from May 5 purchase) = $8,000
Cost of goods sold: $16,300 - $8,000 = $8,300

Therefore, the ending merchandise inventory amount as reported on the balance sheet at December 31, 2015 would be $8,000. The correct answer is C.

Rodriguez Company Had the Following Balances and Transactions During 2015