Question

•Fulbright Corp. uses the periodic inventory system. Inventory at the beginning of the year had 160 units with a unit cost of $50 each.  Fulbright made the following purchases:
Jan 25 280 units at $40
July 23 680 units at $30

•Sales for the year totaled 1,000 units, leaving 120 units on hand at the end of the year. Ending inventory using the FIFO method is (do not use $ or , or pennies in your answer):

Answer 1

Under FIFO, First purchased items are sold first. So ending inventory under FIFO will consist of items most recently purchased

Ending Inventory under FIFO = 120 units

Total units available for sale = 160 units + 280 units + 680 units = 1,120 units

Less: Sales = 1,000 units

Ending Inventory = 120 units

Cost of Ending inventory = (120 units * $30)

Cost of Ending inventory = 3,600