Question

Oriole Company was formed on December 1, 2019. The following information is available from Oriole's inventory record for Product X.
Units Unit Cost
January 1, 2020 (beginning inventory) 2,000 $15
Purchases:
January 5, 2020 2,500 $17
January 25, 2020 2,200 $18
February 16, 2020 1,100 $19
March 15, 2020 2,200 $20
A physical inventory on March 31, 2020, shows 3,300 units on hand.
Required:
(a) Prepare schedules to compute the ending inventory at March 31, 2020, under FIFO method.

Answer 1

Answer:

FIFO Ending Inventory $ 64900

Explanation:

Oriole Company

Date                         Particulars        Units       Unit Cost       Total Cost

January 1, (beginning inventory)    2,000              $15         30,000

January 5,            Purchases:         2,500              $17          42500

January 25,          Purchases:         2,200               $18         39600

February 16,        Purchases:           1,100                 $19        20900

March 15,               Purchases:         2,200              $20        44000

Total                                                10,000                            $ 177000  

A physical inventory on March 31, 2020, shows 3,300 units on hand.

FIFO means first in first out. It is a method of calculating inventory items. In it the first items purchased are sold out first. Following this rulethe ending inventory FIFO can be calculated by moving backwards from March 15 purchases as follows.

FIFO Ending Inventory $ 64900

March 15 Purchases  2,200 units at $20=$ 44000

February 16,Purchases units 1,100 at $19 =$20900