178k views
4 votes
On August 15, it sold 30 units. Using the FIFO perpetual inventory method, what is the value of the inventory at August 15 after the sale?

1 Answer

5 votes

Answer: $210

Step-by-step explanation:

When using the First In First Out (FIFO) method of Inventory Valuation, the company sells the goods that it acquired earliest first and then sells the goods acquired later last.

This company sold 30 units on August 15.

That would mean that using FIFO, the company sold all of its August opening inventory of 15 units. It also sold all 10 units purchased on August 5th and then sold 5 units from the August 12th purchase of 20 units.

= 15 + 10 + 5

= 30 units

This means that the only units left are;

= 20 - 5

= 15 units of the August 12th purchase are left.

Units cost $14 each.

Value of Inventory after sale = 15 units * 14

= $210

On August 15, it sold 30 units. Using the FIFO perpetual inventory method, what is-example-1
User Alex Yeung
by
7.1k points