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Rutgers Industries has the following inventory information for 2019: Jan 1 Beginning Inventory 240 units at $100 per unit June 13 Purchases 340 units at $150 per unit Dec 14 Purchases 370 units at $200 per unit Rutgers sold 500 units during 2019 and had 450 units remaining at December 31, 2019. Assuming that a periodic inventory system is used, what is the value of ending inventory at December 31, 2019 on a FIFO basis

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Answer:

$86,000

Explanation:

FIFO means first in, first out. It means that the first purchased inventory is the first to be sold.

This means thay the 500 units sold would be taken from the earliest purchased inventory and the ending inventory would be the most recently purchased inventories.

Ending inventory = (80 × $150) + (370 × $200) = $12,000 + $74,000 = $86,000

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