A company\u2019s inventory records report the following:<\/p>\n\n\n\n
August 1<\/p>\n\n\n\n
Beginning balance<\/p>\n\n\n\n
15 units @ $12<\/p>\n\n\n\n
August 5<\/p>\n\n\n\n
Purchase<\/p>\n\n\n\n
10 units @ $13<\/p>\n\n\n\n
August 12<\/p>\n\n\n\n
Purchase<\/p>\n\n\n\n
20 units @ $14<\/p>\n\n\n\n
On August 15, it sold 30 units. Using the FIFO perpetual inventory method, what is the value of the inventory at August 15 after the sale? $140 $160 $210 $380 $590<\/p>\n\n\n\n
The Correct Answer and Explanation is:<\/mark><\/strong><\/p>\n\n\n\n To determine the value of the inventory on August 15<\/strong> after the sale, using the FIFO (First-In, First-Out)<\/strong> perpetual inventory<\/strong> method, we need to follow the logic of selling the oldest (first-in) units first and update inventory balances after each transaction.<\/p>\n\n\n\n August 1 \u2013 Beginning Balance<\/strong> August 5 \u2013 Purchase<\/strong> Inventory after August 5:<\/strong><\/p>\n\n\n\n August 12 \u2013 Purchase<\/strong> Inventory after August 12:<\/strong><\/p>\n\n\n\n Under FIFO, we sell from the oldest inventory first<\/strong>:<\/p>\n\n\n\n Total cost of goods sold (COGS) = \\$180 + \\$130 + \\$70 = \\$380<\/strong><\/p>\n\n\n\n We sold a total of 30 units. Remaining units:<\/p>\n\n\n\n In inventory accounting, the FIFO perpetual<\/strong> method ensures that the earliest acquired goods are sold first. With perpetual tracking, the inventory is updated continuously after every transaction.<\/p>\n\n\n\n Here, the company began August with 15 units priced at \\$12 each. A purchase on August 5 added 10 more units at \\$13, and another on August 12 added 20 units at \\$14 each. After all purchases, the company had 45 total units in inventory before the sale on August 15.<\/p>\n\n\n\n Under FIFO, the sale of 30 units means we sell the 15 oldest units first (from August 1), then the next 10 (from August 5), and the remaining 5 units from the August 12 purchase. This matches the FIFO principle of reducing the oldest inventory first.<\/p>\n\n\n\n The value of the sold units (COGS) equals:<\/p>\n\n\n\n After the sale, only 15 of the \\$14 units (from August 12) remain. So, the ending inventory value is:<\/p>\n\n\n\n This is the value of inventory remaining on August 15.<\/p>\n\n\n\n A company\u2019s inventory records report the following: August 1 Beginning balance 15 units @ $12 August 5 Purchase 10 units @ $13 August 12 Purchase 20 units @ $14 On August 15, it sold 30 units. Using the FIFO perpetual inventory method, what is the value of the inventory at August 15 after the sale? 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\n\n\n\n\ud83d\udce6 Inventory Records Before the Sale:<\/strong><\/h3>\n\n\n\n
15 units @ \\$12 = \\$180<\/p>\n\n\n\n
10 units @ \\$13 = \\$130<\/p>\n\n\n\n\n
= 25 units<\/strong>, total value = \\$180 + \\$130 = \\$310<\/strong><\/li>\n<\/ul>\n\n\n\n
20 units @ \\$14 = \\$280<\/p>\n\n\n\n\n
= 45 units<\/strong>, total value = \\$180 + \\$130 + \\$280 = \\$590<\/strong><\/li>\n<\/ul>\n\n\n\n
\n\n\n\n\ud83d\uded2 August 15 \u2013 Sale of 30 Units (FIFO method):<\/strong><\/h3>\n\n\n\n
\n
\n\n\n\n\ud83d\udcca Remaining Inventory After Sale:<\/strong><\/h3>\n\n\n\n
\n
\n\n\n\n\u2705 Correct Answer: \\$210<\/strong><\/h3>\n\n\n\n
\n\n\n\n\ud83d\udcd8 Explanation (300+ words):<\/strong><\/h3>\n\n\n\n
\n
\u2192 Total COGS = \\$380<\/strong><\/li>\n<\/ul>\n\n\n\n\n
\n\n\n\n\u2705 Final Answer: \\$210<\/strong><\/h3>\n","protected":false},"excerpt":{"rendered":"