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The inventory records for Cookie Co
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
Expert Solution
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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