Question

A company has beginning inventory of 42 units at a cost of $13.00 each on October 1. On October 5, it purchases 27 units at $14.00 per unit. On October 12 it purchases 37 units at $15.00 per unit. On October 15, it sells 81 units.

Required:
Using the FIFO periodic inventory method, what is the value of the inventory at October 15 after the sale?

Answer 1

$375

Step-by-step explanation:

October 1: 42 units at $13 = $546

October 5: 27 units at $14 = $378

October 12: 37 units at $15 = $555

total = $1,479

October 15: 81 units sold

Cost of goods sold under FIFO:

42 units at $14 = $546

27 units at $14 = $378

12 units at $15 = $180

total = $1,104

inventory on October 15 after sale = $1,479 - $1,104 = $375