Question

Question 4 3 pts ABC Company employs a periodic inventory system and sells its inventory to customers for $23 per unit. ABC Company reported the following inventory information for the month of May: May 1 May 6 May 8 May 13 May 18 May 21 May 28 May 30 Beginning inventory 4,200 units @ $9 cost per unit Purchased 2,000 units @ $12 cost per unit Sold 3,000 units Purchased 4,000 units @ $8 cost per unit Sold 2,100 units Purchased 2,500 units @ $6 cost per unit Sold 2,200 units Purchased 2,300 units @ $17 cost per unit ABC Company reported operating expenses of $26,100 for May and they had a tax rate of 43% Calculate the dollar amount of ending inventory shown on ABC Company's May 31 balance sheet using the FIFO method.

Answer 1

Ans.	Date	Units (a)	Unit cost (b)	Total (a*b)
	01-May	4200	$9.00	$37,800
	06-May	2000	$12.00	$24,000
	13-May	4000	$8.00	$32,000
	21-May	2500	$6.00	$15,000
	30-May	2300	$17.00	$39,100
	Available for sale	15000		$147,900
	Total units sold (3,000 + 2,100 + 2,200)   =   7,300 units
	Ending inventory units = Units available for sale - Total units sold
	15,000 - 7,300
	7,700 units
	*In FIFO method the units that have purchased first, are released the first one and the ending inventory
	units remain from the last purchases.
	Periodic FIFO:
	Date	Units	Rate	Total
	30-May	2300	$17.00	$39,100
	21-May	2500	$6.00	$15,000
	13-May	2500	$8.00	$20,000
	Ending inventory	7300		$74,100
	So, the ending inventory that would be reported on ABC company's balance sheet on May 31 is $74,100.