Answer:
Cost of ending inventory is $3,550
Revised Question:
The given question is incomplete. The complete question is as follows:
A company had the following purchases and sales during its first year of operations:
Purchases Sales
January 10: 6 units at $120
February 20: 5 units at $125
May 15: 9 units at $130
September 12: 8 units at $135
November 10: 13 units at $140
On December 31, there were 26 units remaining in ending inventory. Using the Perpetual FIFO inventory valuation method, what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.)
Explanation:
FIFO (First in First out) inventory system refers to the inventory system in which it is assumes that first purchases are the first sold goods. So for calculating the cost of ending inventory we'll calculate the value of unsold goods.
<em>Calculations:</em>
<h3> Unsold goods Cost of unsold goods</h3><h3> 13 (13 X $140) =$1820</h3><h3> 8 (8 X $135) =$1080</h3><h3><u> 5 (5 X $130) =$650</u></h3><h3>Total unsold goods 26 Total cost of unsold goods =$3,550 </h3>
So the cost of ending inventory is $3,550
