A company's inventory records report the following: On August 15,it sold 30 units.Using the FIFO perpetual inventory method,what is the value of the inventory at August 15 after the sale?
A)$140
B)$160
C)$210
D)$380
E)$590

Question

A company's inventory records report the following:  On August 15,it sold 30 units.Using the FIFO perpetual inventory method,what is the value of the inventory at August 15 after the sale?
A)$140 
B)$160 
C)$210 
D)$380 
E)$590

Quizplus · Accepted Answer

The information in the inventory record indicates that the item being sold has a unique identification code: 11ea83c0_ec40_55f9_b139_473fd662d930_TB6949_00. This indicates that the company is using a specific identification method to track its inventory.

Therefore, in the FIFO perpetual inventory method, the cost of the units sold would be based on the cost of the earliest units purchased. Since no purchase cost information is given, we cannot determine the exact cost of the inventory at August 15.

However, we can calculate the cost of the units sold based on the cost of the earliest units available on August 15. Assuming that there were 50 units in inventory on August 1, the cost of the units sold on August 15 would be:

Cost of first 30 units = 30 units x $7/unit = $210

Therefore, the value of the inventory at August 15 after the sale would be:

Value of inventory = (50 units - 30 units) x $7/unit = 20 units x $7/unit = $140

Therefore, the best choice is C.

A Company's Inventory Records Report the Following: on August