Question

A physical inventory on December 31 shows 4,000 units on hand. Eneri sells the units for $13 each. The company has an effective tax rate of 20%. Eneri uses the periodic inventory method. Under the FIFO method, the December 31 inventory is valued at

Answer 1

Answer:

The question is missing below:

Eneri Company's inventory records show the following data:

                                              Units      Unit Cost

Inventory, January 1  10,000      $9.20

Purchases:   June 8  9,000      $8.00

                November 8  6,000       $7.00

Under FIFO method,the December 31 inventory is valued at $28,000

Explanation:

Under FIFO first-in first out ,the understanding is that inventory bought first is the first to be sold,hence the closing inventory is to be valuated at the price of the last purchase since the last purchase units is more than closing inventory.

As a result, the 4,000 closing inventory is to be valued at $7 each,which gives $28,000($7*4000).