Use the following information for questions below
A company had the following inventory activity during April:
$$\begin{array}{l}
\text { }\
\begin{array} { l l l l l}
&&\text {units }&\text { unit cost}&\text { total cost}\
\text { beginning}&\text {inventory }&800&\$10.00&\$8,000\
\text { purchase}&\text {april 6 }&1,400&11.00&15,400\
\text {sale }&\text {april }&(1,500)\
\text {purchase }&\text {april 17}&900&10.50&9,450\
\text {sale }&\text {april 24 }&(900)\
\end{array}
\end{array}$$
-If the company is using a perpetual system and the FIFO cost formula,what is the ending inventory closest to?
A)$7,100
B)$7,350
C)$7,650
D)$7,920

Question

Use the following information for questions below
A company had the following inventory activity during April:
$$\begin{array}{l}
\text { }\
\begin{array} { l l l l l} 
&&\text {units }&\text { unit cost}&\text { total cost}\
\text { beginning}&\text {inventory }&800&\$10.00&\$8,000\
\text { purchase}&\text {april 6 }&1,400&11.00&15,400\
\text {sale }&\text {april  }&(1,500)\
\text {purchase }&\text {april  17}&900&10.50&9,450\
\text {sale  }&\text {april  24 }&(900)\
\end{array}
\end{array}$$
-If the company is using a perpetual system and the FIFO cost formula,what is the ending inventory closest to?
A)$7,100
B)$7,350
C)$7,650
D)$7,920

Quizplus · Accepted Answer

Using the FIFO cost formula, we assume that the first items purchased are the first items sold. Therefore, the ending inventory will be the cost of the last items purchased. In this case, the last items purchased had a cost of $47 per unit. The ending inventory is calculated as:
(100 units x $47 per unit) = $4,700
Adding this to the cost of the beginning inventory ($2,650), and subtracting the cost of goods sold during April ($4,000), we get:
$2,650 beginning inventory + $4,700 ending inventory - $4,000 cost of goods sold = $3,350 ending inventory
The closest answer choice is B) $7,350.

Use the Following Information for Questions Below a Company Had

Use the Following Information for Questions Below
a Company Had