Question

Whispering Winds Appliance uses a perpetual inventory system. For its flat-screen television sets, the January 1 inventory was 3 sets at $560 each. On January 10, Whispering Winds purchased 6 units at $670 each. The company sold 2 units on January 8 and 4 units on January 15.
Compute the ending inventory under FIFO.

Answer 1

Answer:

Ending inventory= $2,010

Explanation:

Giving the following information:

January 1: 3 sets at $560 each.

January 10: purchased 6 units at $670 each.

The company sold 2 units on January 8 and 4 units on January 15.

First, we need to calculate the number of units in ending inventory:

Units in inventory= total units - sales

Units in inventory= 9 - 6= 3

Under the FIFO (first-in, first-out) method, the cost of ending inventory is calculated using the price of the last units purchased.

Ending inventory= 3*670= $2,010