Question

The following data represent the beginning inventory and, in order of occurrence, the purchases and sales of Sox, Inc. For an operating period. Units Unit Cost Total Cost Units Sold Beginning Inventory 32 $72 $2,304 Sale No. 1 10 Purchase No. 1 28 80 2,240 Sale No. 2 32 Purchase No. 2 20 76 1,520 Totals 80 $6,064 42 Assuming Sox, Inc. Uses FIFO periodic inventory procedures, the ending inventory cost is

Answer 1

Assuming Soz, Inc. uses the FIFO periodic inventory procedures, the ending inventory cost is $2,960.

What is the FIFO periodic inventory system?

The FIFO periodic inventory system assumes that goods sold first are the ones put in stock earlier.

To determine the ending inventory, the units bought last are used, and this calculation is always done at the end of the financial period, instead of when units are sold.

Data and Calculations:

                                 Units    Unit Cost     Total Cost     Units Sold

Beginning Inventory  32            $72           $2,304

Sale No. 1                                                                              10

Purchase No. 1          28              80              2,240

Sale No. 2                                                                            32

Purchase No. 2         20              76               1,520

Totals                        80                              $6,064            42

Ending inventory = 38 (80 - 42) units

Ending inventory cost = $2,960 (20 x $76 + 18 x $80)

Thus, assuming Soz, Inc. uses the FIFO periodic inventory procedures, the ending inventory cost is $2,960.

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