Question

The Boxwood Company sells blankets for $39 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.

Date	Blankets	Units	Cost
May 3	Purchase	10	$20
10	Sale	3
17	Purchase	11	$15
20	Sale	4
23	Sale	3
30	Purchase	11	$21

Assuming that the company uses the perpetual inventory system, determine the May 31 inventory balance using the FIFO inventory cost method.

a.$462

b.$396

c.$330

d.$440

Answer 1

The ending Inventory Value for the month of May using FIFO is $396 FIFO Inventory System sell the Older Inventory Acquired First Followed by the Recent Acquired Inventory May 03 Inventory 10 Unit * $20 =$200 May 10 Inventory 7 Unit * $20 = $120 May 17 Inventory 7 Unit x $20 =$120 11 Unit x $15= $165 May 20 Inventory 3 Unit x $20 = $60 11 Unint $15 =$165 May 23 Inventory 11 Unit x $15 =$165 May 30 Inventory 11 Unit x S15 = $165 11 Unit x $21 = $231

The ending Inventory Value for the month of May using FIFO is b. $396 FIFO Inventory System sell the Older Inventory Acquired First Followed by the Recent Acquired Inventory May 03 Inventory 10 Unit x $20 =$200 May 10 Inventory 7 Unit $20 = $120 May 17 Inventory 7 Unit x S20 =$120 11 Unit x $15= $165 May 20 Inventory 3 Unit * $20 = $60 11 Unint x $15 =$165 May 23 Inventory 11 Unit x $15 =$165

May 30 Inventory 11 Unit x $15 = $165 11 Unit x $21 = $231 $396 Total

Hence, Option B is correct.