A company's inventory records report the following: $$\begin{array} { | l | l | l | }
\hline \text { August 1 } & \text { Begining balance } & 15 \text { units @ \$12 } \
\hline \text { August 5 } & \text { Purchase } & 10 \text { units @ \$13 } \
\hline \text { August 12 } & \text { Purchase } & 20 \text { units @ \$14 } \
\hline
\end{array}$$ 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) $590
C) $380
D) $160
E) $210

Question

A company's inventory records report the following: $$\begin{array} { | l | l | l | } 
\hline \text { August 1 } & \text { Begining balance } & 15 \text { units @ \$12 } \
\hline \text { August 5 } & \text { Purchase } & 10 \text { units @ \$13 } \
\hline \text { August 12 } & \text { Purchase } & 20 \text { units @ \$14 } \
\hline
\end{array}$$ 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) $590
C) $380
D) $160
E) $210

Quizplus · Accepted Answer

Under FIFO, the oldest inventory costs are used up first. After selling 30 units, 15 units @ $12 and 10 units @ $13 are used, leaving 5 units @ $14. The value of the remaining inventory is 5 units x $14 = $70.

A Company's Inventory Records Report the Following On August 15, It Sold 30 Units