Question

The following lots of a particular commodity were available for sale during the year: Beginning inventory 10 units at $30 First purchase 25 units at $32 Second purchase 30 units at $34 Third purchase 10 units at $35 The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year. What is the amount of inventory at the end of the year according to the FIFO method

Answer 1

Answer:

Fifo Ending Inventory = $ 690

Explanation:

The first in first out method implies that only the units at the end are left out in the ending inventory.                

Fifo Ending Inventory = $ 690

10 units from third purchase at $ 35= $ 350

10 units from second purchase at $ 34= $ 340

Total 20 units FIFo method = $ 690

Working

         

                                                                  Total Cost

Beginning inventory        10 units at $30           $ 300

First purchase                 25 units at $32            $ 800

Second purchase            30 units at $34            $ 1020

Third purchase                10 units at $35            $ 350