Question

Date Transaction Number of Units Unit Cost Apr. 1 Beginning inventory 500 $2.40 Apr. 20 Purchase 400 2.50 700 units of inventory were sold during the month. Ending inventory assuming FIFO would be:

Answer 1

Ending inventory= $500

Step-by-step explanation:

Giving the following information:

Apr. 1 Beginning inventory 500 $2.40

Apr. 20 Purchase 400 2.50

700 units of inventory were sold during the month

First, we need to determine the number of units in ending inventory:

Ending inventory in units= 900 - 700= 200

Under the FIFO (first-in, first-out) method, the ending inventory is calculated using the cost of the last units incorporated into the inventory.

Ending inventory= 200*2.5

Ending inventory= $500