Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September: Sept. 1 Inventory 20 units at $20 4 Sale 10 units 10 Purchase 30 units at $25 17 Sale 20 units 30 Purchase 10 units at $30 If Addison uses FIFO, the cost of the ending merchandise inventory on September 30 is a.$650 b.$750 c.$700 d.$800

correct option is d.$800

Explanation:

given data

Sept. 1 Inventory = 20 units at $20

Sept. 4 Sale = 10 units

Sept. 10 Purchase = 30 units at $25

Sept. 17 Sale = 20 units

Sept. 30 Purchase = 10 units at $30

to find out

uses FIFO, the cost of the ending merchandise inventory

solution

we use here FIFO

Date Particulars Workings Amount

Sep 1 Opening inventory 20 units * $20 $400

Sep 4 Sales 10 units * $20 $200

Sep 10 Purchase 30 units * $25 $750

Sep 17 Sales (10 units * $20) + (10 units * $25) $450

Sep 30 Purchase 10 Units * $30 $300

Closing inventory as per FIFO $800

so correct option is d.$800