Question

150 Smitty's Hair Salon, Tire Care, and Candy Shop recorded the following purchases, and inventory levels, of candy (in cases) from last operating period. Date Description Cases Unit Price T. Cost OP INV $1.10 $165.00 Purchases 50 $1.12 $56.00 Purchases $1.14 $54.72 Purchases $1.15 $71.30 Purchases $1.18 $63.72 Purchases $1.18 $36.58 Purchases $1.12 $49.28 Purchases $1.10 $72.60 Purchases $1.08 $86.40 Purchases 90 $1.15 $103.50 Purchases $1.15 $59.80 Purchases $1.12 $76.16 Purchases $1.20 $38.40 Closing Inventory: 200 cases Using the information above, calculate the closing inventory value using the method indicated below: First-In, First-Out (FIFO) Method Select one: a. $226 O b. $240 O c. $229.56 O d. $221

Answer 1

Answer c. $229.56 Working Notes: Ending Inventory under First-In, First-Out(FIFO) Particulars Units Unit Cost Total 22. Purchases 48 S 1.15 $ 55.20 24. purcahses 52S 1.15 S 59.80 26. Purchases 68 $ 1.12S 76.16 30. Purchases 32 $ 1.20 S 38.40 200 S 229.56 Note: This Method is used to calculate the value of inventory on hand at the end of an accounting period and the cost of goods sold during the period. This method assumes that inventory purchased or manufactured first is sold first and newer inventory remains unsold, the actual flow of inventory may not exactly match the first-in, first-out pattern.