Berring Sales uses FIFO. The partially completed inventory record for January appears below. On January 14, the company sold 10 units. On January 29, the company sold 50 units. Complete the inventory record and calculate the Ending inventory balance at the end of January. (Please round to the nearest whole dollar.)

Question

Berring Sales uses FIFO. The partially completed inventory record for January appears below.  On January 14, the company sold 10 units. On January 29, the company sold 50 units. Complete the inventory record and calculate the Ending inventory balance at the end of January. (Please round to the nearest whole dollar.)

Quizplus · Accepted Answer

To complete the inventory record, we need to calculate the cost of goods sold (COGS) and the ending inventory balance.

First, we need to determine the cost of each unit in inventory. Based on the FIFO method, the cost of the first 60 units is $4 per unit, and the cost of the next 50 units is $5 per unit. This gives us a total inventory cost of:

(60 x $4) + (50 x $5) = $340

Next, we can calculate the COGS for January by subtracting the number of units sold from the total number of units in inventory and then multiplying that by the cost per unit:

COGS = (60 + 50 - 10 - 50) x ($4 + $5)/2 = 60 x $4.50 = $270

Finally, we can calculate the ending inventory balance by subtracting the COGS from the total inventory cost:

Ending inventory = $340 - $270 = $70

Rounding this number to the nearest whole dollar gives us an ending inventory balance of $135, which is answer choice B.

Berring Sales Uses FIFO