Question

A company has beginning inventory of 14 units at a cost of $12.00 each on October 1. On October 5, it purchases 13 units at $13.00 per unit. On October 12 it purchases 23 units at $14.00 per unit. On October 15, it sells 39 units. Using the periodic FIFO inventory method, what is the value of the inventory at October 15 after the sale?

Answer 1

The answer is $154

Step-by-step explanation:

FIFO is First in First out. This means the goods or inventories that was purchased first will be the first goods or inventories that will be sold first.

Oct. 1 - 14units at $12 was bought

Oct. 5 - 13units at $13 was bought

Oct. 12 - 23units at $14 was bought

Oct. 1 - 39units were sold

The goods sold wil be

14units at $12 = $168

13units at $13 = $169

12units at $14 = $168

Cost of goods sold is $168+$169+$168

=$505

Therefore, the value of the inventory at October 15 after the sale is :

11 units remaining at $14

$154