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Homework answers / question archive / The inventory records for Cookie Co

The inventory records for Cookie Co

Finance

The inventory records for Cookie Co. reflected the following:

Beginning Inventory @ July 1

200 units @ $1.00

First Purchase @ July 8

300 units @ $1.10

Second Purchase @ July 15

400 units @ $1.20

Third Purchase @ July 26

100 units @ $1.30

Sales @ July 31

800 units @ $1.50

Determine the amount of ending inventory  assuming the FIFO cost flow method.

$130

$200

$250

$100

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Computation of Amount of Ending Inventory using FIFO Method:

Total units = 200+300+400+100 = 1000

Number of Units Sold = 800

 

Ending Inventory in Units = 1000-800 = 200

 

According to FIFO Method units purchased first will be sold out first. So, In this case Units from last two purchases will remain.

So,

Amount of Ending Inventory = (100 units*$1.30) + (100 units*$1.20)

= $130+$120

Amount of Ending Inventory = $250

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