The following information relates to inventory for Shoeless Joe Inc. $$\begin{array} { l l c c }
\text { Date } & & \text { Quantity } & \text { Price } \
\hline \text { March 1 } & \text { Beginning Inventory } & 20 & \$ 2 \
\text { March 7 } & \text { Purchase } & 15 & 3 \
\text { March 11 } & \text { Sale } & 25 & 7 \
\text { March 12 } & \text { Purchase } & 20 & 4
\end{array}$$ At what amount would Shoeless report ending inventory using FIFO cost flow assumptions?

Question

The following information relates to inventory for Shoeless Joe Inc. $$\begin{array} { l l c c } 
\text { Date } & & \text { Quantity } & \text { Price } \
\hline \text { March 1 } & \text { Beginning Inventory } & 20 & \$ 2 \
\text { March 7 } & \text { Purchase } & 15 & 3 \
\text { March 11 } & \text { Sale } & 25 & 7 \
\text { March 12 } & \text { Purchase } & 20 & 4
\end{array}$$ At what amount would Shoeless report ending inventory using FIFO cost flow assumptions?

Quizplus · Accepted Answer

FIFO (First-In, First-Out) assumes that the first items purchased are the first items sold. Therefore, the ending inventory would consist of the most recent purchases. In this case, the ending inventory would be the 20 units purchased on March 12 at a cost of $4 per unit, for a total of $80.

The Following Information Relates to Inventory for Shoeless Joe Inc