A company has beginning inventory of 14 units at a cost of $12.00 each on October 1. On October 5, it purchases 13 units at $13.00 per unit. On October 12 it purchases 23 units at $14.00 per unit. On October 15, it sells 39 units. Using the periodic FIFO inventory method, what is the value of the inventory at October 15 after the sale?

Question

Jennings

Business

29 May, 01:24

A company has beginning inventory of 14 units at a cost of $12.00 each on October 1. On October 5, it purchases 13 units at $13.00 per unit. On October 12 it purchases 23 units at $14.00 per unit. On October 15, it sells 39 units. Using the periodic FIFO inventory method, what is the value of the inventory at October 15 after the sale?

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Answers (1)

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Ben · Answer 1

The answer is $154

Explanation:

FIFO is First in First out. This means the goods or inventories that was purchased first will be the first goods or inventories that will be sold first.

Oct. 1 - 14units at $12 was bought

Oct. 5 - 13units at $13 was bought

Oct. 12 - 23units at $14 was bought

Oct. 1 - 39units were sold

The goods sold wil be

14units at $12 = $168

13units at $13 = $169

12units at $14 = $168

Cost of goods sold is $168+$169+$168

=$505

Therefore, the value of the inventory at October 15 after the sale is:

11 units remaining at $14

$154