A company purchased 100 units for $20 each on January 31. It purchased 100 units for $30 on February 28. It sold a total of 150 units for $45 each from March 1 through December 31. What is the amount of ending inventory on December 31, 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 100 units sold are from the January purchase ($20 each), and the next 50 units are from the February purchase ($30 each). Ending inventory consists of the remaining 50 units from the February purchase at $30 each, totaling $1,500.

A Company Purchased 100 Units for $20 Each on January