Question

Wildhorse Co. uses a periodic inventory system. Details for the inventory account for the month of January 2017 are as follows:

Units Per unit price Total
Balance, 1/1/2017 320 $5.00 $1600
Purchase, 1/15/2017 160 ..5.70 912
Purchase, 1/28/2017 160 ..5.90 944

An end of the month (1/31/2017) inventory showed that 260 units were on hand. If the company uses FIFO, what is the value of the ending inventory?

Answer 1

Ending inventory= $1514

Step-by-step explanation:

Giving the following information:

Beginning inventory: 320u*$5.00= $1600

Purchase, (1/15/2017)= 160u*5.70= $912

Purchase, (1/28/2017)= 160u*5.90= $944

Ending inventory= 260u

The company uses FIFO (first in, first out).

What is the value of ending inventory?

Ending inventory= 160u*5.90 + 100u*5.70= $1514