Question

Mosher, Inc. had the following balances and transactions during 2017: Supporting Materials Beginning Merchandise Inventory as of January 1, 2017 400 units at $80 March 10 Sold 80 units June 10 Purchased 800 units at $85October 30 Sold 480 unitsWhat would be reported for Ending Merchandise Inventory on the balance sheet at December 31, 2017 if the perpetual inventory system and the first-in, first-out inventory costing method are used?

Answer 1

Answer: $54,400

Step-by-step explanation:

The First in First Out inventory costing method sells earlier purchases first and then sells later ones.

The 80 units sold on March 10 will come from the beginning balance of 400 units leaving it with 320 units.

Of the 480 units sold on October 30, 320 will come from the beginning inventory balance of 320 units leaving;

= 480 - 320

= 160 units.

These 160 units will come from the 800 units purchased on June 10 which means the costing inventory is;

= 800 - 160

= 640 units

Cost of 640 units;

= 640 * 85

= $54,400