Sackett Corporation had a beginning inventory of 10,000 units, which were purchased in the prior year as follows: Units Unit Price September 4,000 $2.00 October 4,000 $2.10 December 2,000 $2.30 In the current year, Sackett purchases an additional 12,000 units (7,000 in June at $2.50 and 5,000 in November at $2.70) and sells 16,000 units. Using the FIFO method, what is Sackett's ending inventory?

Question

Kathryn Irwin

Business

23 April, 20:09

Sackett Corporation had a beginning inventory of 10,000 units, which were purchased in the prior year as follows: Units Unit Price September 4,000 $2.00 October 4,000 $2.10 December 2,000 $2.30 In the current year, Sackett purchases an additional 12,000 units (7,000 in June at $2.50 and 5,000 in November at $2.70) and sells 16,000 units. Using the FIFO method, what is Sackett's ending inventory?

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Answers (1)

Know the Answer?

Zackery Fitzgerald · Answer 1

Sackett's ending inventory is $16000

Explanation:

given data

Units Unit Price

September 4,000 $2.00

October 4,000 $2.10

December 2,000 $2.30

to find out

FIFO method what is Sackett's ending inventory

solution

we know here that unit sold = 16000 units

available for sale = 22000

so ending inventory = 22000 - 16000

ending inventory = $6000

so

unit included 6000 is latest purchase are

so November purchase 5000 @ 2.7 is = $13500

and June purchase 1000 @ 2.5 is = $2500

so total will be = $13500 + $2500

total = $16000