Question

Assume Smart Touch Learning had 11 tablets in its beginning​ inventory, each with a cost of $ 230. On January ​3, Smart Touch Learning purchased 12 tablets at a cost of $ 316 ​each, and on January 10 Smart Touch learning purchased another 8 tablets at $ 326 each. On January ​20, the company sold 8 tablets to a customer. If the company is using the FIFO​ method, what is the​ company's ending inventory under a periodic inventory​ system?

Answer 1

The company's ending inventory under the FIFO method is 0 tablets.

Step-by-step explanation:

Under the FIFO method, the first units purchased are assumed to be the first units sold. In this case, the company initially had 11 tablets in its beginning inventory, which were purchased at a cost of $230 each. On January 3, the company purchased 12 tablets at a cost of $316 each, and on January 10, they purchased another 8 tablets at $326 each. The company then sold 8 tablets on January 20. To calculate the ending inventory, we need to find out how many tablets were left in inventory after the sale.

First, we need to calculate the cost of tablets sold. Since the first units purchased are assumed to be sold first, we start by subtracting 8 units from the beginning inventory of 11 units. This leaves us with 3 tablets from the beginning inventory. The remaining tablets were purchased on January 3 and January 10. We subtract 3 tablets from the 12 units purchased on January 3, leaving us with 9 units. Finally, we subtract 9 units from the 8 units purchased on January 10, resulting in a remaining inventory of 0 units.Therefore, the company's ending inventory under the FIFO method is 0 tablets.