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

Question

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

Quizplus · Accepted Answer

Under FIFO (First In, First Out), the oldest inventory items are sold first. The ending inventory consists of the most recently purchased items. Here, 35 units were purchased (15 at $3 and 20 at $4), and 25 units were sold. This leaves 10 units unsold. The ending inventory will include 10 units from the March 12 purchase at $4 each, totaling $40 (10 units * $4/unit), and 5 units from the March 7 purchase at $3 each, totaling $15 (5 units * $3/unit). Therefore, the ending inventory is $55 (from the March 12 purchase) + $15 (from the March 7 purchase) = $70. However, none of the provided options match this calculation, indicating a potential misunderstanding in the question's setup or a mistake in the calculation. Given the options, the closest approach to explaining FIFO would be to consider all units available for sale and their costs, but the provided answer choices do not align with the typical calculation method for FIFO.

The Following Information Relates to Inventory for Shoeless Joe Inc