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Hi Mr. John
I have been struggling with FIFO for the longest time. I have watched all your lectures yet i can’t seem to ever arrive at the right answer. The answer i got for this question is $4500, which is obviously wrong. Can you please help me answer this question correctly?
Q.) Boomerang Co had 200 units in inventory at 30 November 20X1 valued at $800. During December it made the following purchases and sales.
2/12 Purchased 1,000 @ $5 each
5/12 Sold 700 @ $7.50 each
12/12 Purchased 800 @ $6.20 each
15/12 Purchased 300 @ $6.60 each
21/12 Sold 400 @ $8.00 each
28/12 Sold 500 @ $8.20 eachCalculate the closing inventory using FIFO.
The number of units in inventory are 200 + 1,000 – 700 +800 + 300 – 400 – 500 = 700
They must be the most recent purchases and so 300 must have cost $6.60, and 400 must have cost $6.20.
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