Answer:
Cost of the ending inventory on September 30: $800
20 units $25 per unit, total $500
10 units $30 per unit, total $300
Explanation:
The FIFO is a method used to account value for inventory. Under the method, the first item of inventory purchased is the first one sold.
1. Sep. 1, Inventory 20 units, $20 per unit. Total $400
2. Sep. 4 Sold 10 units
Cost of goods sold = 10 x $20 = $200
The inventory = $400 - $200 = $200 (10 units, $20 per unit)
3. Sep. 10 Purchased 30 units, $25 per unit
The inventory: $950
10 units, $20 per unit, total $200
30 units $25 per unit, total $750
4.Sep. 17 Sold 20 units
Cost of goods sold = 10 x $20 + 10 x $25 = $200 + $250 = $450
The inventory: 20 units $25 per unit, total $500
5.Sep. 30 Purchased 10 units, $30 per unit
Cost of the ending inventory on September 30: $800
20 units $25 per unit, total $500
10 units $30 per unit, total $300
