A company sells garden hoses and uses the perpetual inventory system to account for its merchandise. The beginning balance of the inventory and its transactions during September were as follows:
September 1: Beginning balance of 18 units at $13 each
September 15: Purchased 30 units at $14 each
September 30: Sold 38 units at $30 selling price each
Using the FIFO inventory valuation method, what is the cost of the ending inventory?
Using the LIFO inventory valuation method, what is the cost of the ending inventory?
FIFO Inventory Valuation:
FIFO called the First-in-First-out method is a method of valuing ending inventory by considering that the old purchases of stock are sold first and the recent purchases of stock remain in the ending inventory until when they are sold. The goods are assumed be removed in the order in which they were purchased as per FIFO.
Answer and Explanation: 1
Option c) $140, is correct.
Total sales given = 38 units.
Inventory on hand = 18 units and the purchases made = 30 units. Total units available for...
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fromChapter 6 / Lesson 11
Inventory valuation methods are ways that companies place a monetary value on the items they have in their inventory. Discover different inventory valuation methods, including specific identification, First-In-First-Out (FIFO), Last-In-First-Out (LIFO), and weighted average.