Use this inventory information for the month of September to answer the following question. $\begin{array}{llll}
\text { Sept. } & 1 & \text { Beginning inventory } & 10 \text { units @ } \$ 120 \
& 5 & \text { Purchase } & 60 \text { units @ } \$ 112 \
& 14 & \text { Sale } & 40 \text { units }\
&21& \text { Purchase } &30 \text { units @\$116 }\
&30 &\text { Sale }& 28 \text { units }
\end{array}$
Assuming that a perpetual inventory system is used,what is ending inventory on a FIFO basis?

Question

Use this inventory information for the month of September to answer the following question. $\begin{array}{llll}
\text { Sept. } & 1 & \text { Beginning inventory } & 10 \text { units @ } \$ 120 \
& 5 & \text { Purchase } & 60 \text { units @ } \$ 112 \
& 14 & \text { Sale } & 40 \text { units }\
&21& \text { Purchase } &30 \text { units @\$116 }\
&30 &\text { Sale }& 28 \text { units } 
\end{array}$
 Assuming that a perpetual inventory system is used,what is ending inventory on a FIFO basis?

Quizplus · Accepted Answer

FIFO (first-in, first-out) assumes that the first units purchased are the first units sold. Therefore, the ending inventory would consist of the units purchased on September 5th and 21st. The units purchased on September 5th cost $112 each, and the units purchased on September 21st cost $116 each. Therefore, the ending inventory on a FIFO basis would be:10 units @ $112 = $1,12030 units @ $116 = $3,484Total ending inventory = $4,604

Use This Inventory Information for the Month of September to Answer