The Notebook Company was formed on December 1, 2016. The following information is available from...
Question:
The Notebook Company was formed on December 1, 2016. The following information is available from the company's inventory records:
| Units | Unit Cost | |
|---|---|---|
| Balance as of May 1, 2017, | 800 | $104 |
| Purchases: | ||
| May 7, 2017 | 19,000 | $105 |
| June 11, 2017 | 17,000 | $106 |
| July 23, 2017 | 3,200 | $103 |
| December 15, 2017 | 5,100 | $107 |
The company uses a periodic inventory system, and a physical inventory on December 30, 2017, shows 8,300 units on hand.
Using this information, the ending inventory value using FIFO is:
a. $875,300
b. $870,700
c. $872,210
d. None of the above
Periodic Inventory System:
The periodic inventory system is a manual method of inventory where the inventory is calculated physically after a certain interval of time. Small business units where the inventory transactions are less can use a periodic inventory system as it involves less cost and it is simple to maintain.
Answer and Explanation: 1
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View this answerAccording to the FIFO method, the goods purchased first will be sold first and the last purchases will be part of the ending inventory. Accordingly,...
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