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18 January, 11:10

The following lots of a particular commodity were available for sale during the year: Beginning inventory 10 units at $30 First purchase 25 units at $32 Second purchase 30 units at $34 Third purchase 10 units at $35 The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year. What is the amount of inventory at the end of the year according to the FIFO method

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  1. 18 January, 12:30
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    Fifo Ending Inventory = $ 690

    Explanation:

    The first in first out method implies that only the units at the end are left out in the ending inventory.

    Fifo Ending Inventory = $ 690

    10 units from third purchase at $ 35 = $ 350

    10 units from second purchase at $ 34 = $ 340

    Total 20 units FIFo method = $ 690

    Working

    Total Cost

    Beginning inventory 10 units at $30 $ 300

    First purchase 25 units at $32 $ 800

    Second purchase 30 units at $34 $ 1020

    Third purchase 10 units at $35 $ 350
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