a company has the following purchases and sales during october. using the fifo periodic inventory method…

a company has the following purchases and sales during october. using the fifo periodic inventory method, what is the value of the inventory on october 15 after the sale?\ndate activities units acquired at cost units sold at retail\noctober 1 beginning inventory 15 units @ $22 = $330\noctober 5 purchase 10 units @ $23 = $230\noctober 12 purchase 20 units @ $24 = $480\noctober 15 sales 30 units sold\nmultiple choice\n$210\n$1,040\n$240\n$630\n$360

a company has the following purchases and sales during october. using the fifo periodic inventory method, what is the value of the inventory on october 15 after the sale?\ndate activities units acquired at cost units sold at retail\noctober 1 beginning inventory 15 units @ $22 = $330\noctober 5 purchase 10 units @ $23 = $230\noctober 12 purchase 20 units @ $24 = $480\noctober 15 sales 30 units sold\nmultiple choice\n$210\n$1,040\n$240\n$630\n$360

Answer

Explanation:

Step1: Calculate units available for sale

Total units available = 15 (beginning inventory) + 10 (Oct 5 purchase)+ 20 (Oct 12 purchase)=45 units

Step2: Determine units sold

30 units are sold on October 15.

Step3: Apply FIFO method for cost - of - goods - sold

Under FIFO, we first sell the oldest units. 15 units from beginning inventory at $22 each, cost = 15×$22 = $330 10 units from Oct 5 purchase at $23 each, cost = 10×$23 = $230 5 units from Oct 12 purchase at $24 each, cost = 5×$24 = $120 Total cost of goods sold = $330 + $230+ $120=$680

Step4: Calculate ending inventory value

Ending inventory units = 45 - 30=15 units These 15 units are from the Oct 12 purchase at $24 each. Ending inventory value = 15×$24 = $360

Answer:

$360