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Homework answers / question archive / Addison, Inc

Addison, Inc

Finance

Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September:

Sept. 1

Inventory 20 units at $20

4 Sale 10 units

10 Purchase 30 units at $25

17 Sale 20 units

30 Purchase 10 units at $30

 

If Addison uses FIFO, the cost of the ending merchandise inventory on September 30 is

a.$800

b.$650

c.$700

d.$750

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FIFO Method:                
  Goods available for Sale Cost of Goods Sold Ending Inventory
Date Units Unit cost Total Cost Units Unit cost Total Cost Units Unit Cost Total Cost
Sep-01             20 20 400
Sep-04       10 $20  $200  10 20 200
Sep-10 30 25 750       10 20 200
              30 25 750
Sep-17       10 $20  $200       
        10 $25  $250  20 $25  $500 
Sep-30 10 30 300       20 $25  $500 
              10 30 300
                   
Total       30   650 30   800

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