Question

A company has beginning inventory of 15 units at a cost of $12 each on October 1. On October 5, it purchases 10 units at $13 per unit. On October 12 it purchases 20 units at $14 per unit. On October 15, it sells 30 units. Using the periodic FIFO inventory method, what is the value of the inventory at October 15 after the sale?

Answer 1

Answer:

The correct answer is $210.

Explanation:

According to the scenario, the computation of the given data are as follows:

01-Oct Begin In         15.00    $12.00     =  $180.00  

05-Oct Purchase         10.00    $13.00     =  $130.00  

12-Oct Purchase         20.00    $14.00     =  $280.00

So, If it sells 30 Units,

Then,

Begin In         15.00    $12.00     =  $180.00

Sell                    10.00    $13.00     =  $130.00  

Sell                   5.00    $14.00     =  $70.00

Remaining units     15 units

So, Total value of inventory = Remaining unit × $14

= 15 units × $14

= $210