The following scenario will be used for the next three questions Thorin Corp. be

Question

The following scenario will be used for the next three questions Thorin Corp. began operations in 2017. It is a merchandiser of a single item - Product Q and uses the Periodic Inventory method. The following relates to purchases of Product Q during 2017: Date Units 400 300 600 300 300 100 Cost Per Unit $12 $20 $24 $28 $32 $36 Total Cost $4,800 $6,000 $14,400 $8,400 $9,600 $3,600 $46,8000 1/02/17 6/25/17 10/16/17 12/16/17 Goods avaiable for sale 2,000 At 12/31/17, a physical inventory indicted 420 units of Product Q on hand. Question 28 2 pts Assuming the FIFO method, inventory should be reported in the 12/31/17 balance sheet at: $5,040 $5,600 $13,760 $15,120

Explanation / Answer

FIFO is a cost flow assumption often used to remove costs from the Inventory account when an item in inventory had been purchased at varying costs. Under FIFO, the oldest cost of an item in inventory will be removed first when one of those items is sold. Inventory should be reported in balance sheet at units rate total value 25/6 20 28 560 16/10 300 32 9600 16/12 100 36 3600 13760 Answer

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