Question

A company has inventory of 15 units at a cost of $12 each on August 1. On August 5, they purchased 10 units at $13 per unit. On August 12 they purchased 20 units at $14 per unit. On August 15, they sold 30 units. Using the FIFO perpetual inventory method, what is the value of the inventory at August 15 after the sale? 140 160 210 380 590

Answer 1

210

Working:

Ending inventory under FIFO perpetual inventory method is calcuted as follows:

Increases						Decreases				Balance on hand
Date	Particulars	Quantity	Unit cost	Total		Quantity	Unit cost	Total		Quantity	Unit cost	Total
August 1	Beginning Inventory	15	$          12	$        180						15	$          12	$        180
August 5	Purchase	10	$          13	$        130						15	$          12	$        180
										10	$          13	$        130
Total										25		$        310
August 12	Purchase	20	$          14	$        280						15	$          12	$        180
										10	$          13	$        130
										20	$          14	$        280
Total										45		$        590
August 15						15	$          12	$        180		15	$          14	$        210
						10	$          13	$        130
						5	$          14	$          70
Total						30		$        380		60		$        210