The inventory transactionsare as follows: Units Unit cost ExtendedValue Beginnin

Question

       The inventory transactionsare as follows:

                                            Units             Unit cost        ExtendedValue

         Beginninginventory        300                  $20                  $6,000

         Purchases2-10-2002        400                  $22                   8,800

         Purchases2-20-2002        200                  $23                   4,600

        Available                          900                                        $19,400

        Sales       2-15-2002        500                                   

         EndingInventory             400

Using the information outlined above, what is the value of theending inventory for a perpetual inventory system using theFIFO inventory valuation?

A.        $8,000.00

B.        $8,200.00

C.        $8,600.00

D.        $8,828.55

E.         $9,000.00

Explanation / Answer

E. $ 9,000 Explanation FIFO inventory system is selling the first inventories. Sales is 500 units , so beginning 300 is gone and 200 from the2/10/2002 purchases is gone. Remaining 200 * 22 =   4,400                 200 * 23 = 4,600 400units                    9,000

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