Question

Partridge Bookstore had 500 units on hand at January 1, costing $9 each. Purchases and sales during the month of January were as follows:Partridge does not maintain perpetual inventory records. According to a physical count, 365 units were on hand at January 31.The cost of the inventory at January 31, under the FIFO method isA : $3,285. B : $3,900. C : $4,015. D : $3,650.

Answer 1

The cost of the inventory on January 31, under the FIFO method, is $3,285.

Step-by-step explanation:

The cost of the inventory on January 31, under the FIFO (First-In, First-Out) method can be calculated by determining the cost of the units sold first. Since Partridge Bookstore does not maintain perpetual inventory records, we assume that the 365 units on hand on January 31 are the units sold during January. The cost of these units can be calculated by finding the product of the number of units sold and the cost of the earliest units purchased.

In this case, we start with the 500 units on hand at January 1, costing $9 each. So, the cost of the units sold is 365 units x $9 = $3,285.

Therefore, the cost of the inventory on January 31, under the FIFO method, is $3,285.

Answer 2

A : $3,285

Step-by-step explanation:

On January 1, for Partridge Bookstore

Units held = 500 units

Cost of the units = $9

Total value = 500 × $9

= $4,500

If there are 365 units were on hand at January 31, cost of the inventory at January 31, under the FIFO method

= $9 × 365

= $3,285

The right option is A : $3,285.