Inventory

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July 25, 2012 at 12:46 pm #53858
mbathdu
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A company values its inventory using the FIFO method. At 1 January 20X5 the company has 800 widgets in inventory, valued at $75 each.
During the year ended 31 December 20X5 the following transactions took place:

20X5
1 February Purchased 500 widgets At $80 each
1 May Sold 400 widgets For $45, 000
1 August Purchased 450 widgets At $69 each
15 Nov Sold 450 widgets For $28,750

What is the value of the company’s closing inventory of widgets at 31 December 20X5?
July 25, 2012 at 3:46 pm #102125
tariqkath
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The value of the closing inventory is $75,050 or $67,050.. 🙂
July 27, 2012 at 12:41 am #102126
Anonymous
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$67,050.
Closing units = 800+500-400+450-450=900 units
valued FIFO at =(450 x $69) + (450 x $80) = $67,050
July 27, 2012 at 10:45 am #102127
tariqkath
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@trea2401 said:
$67,050.
Closing units = 800+500-400+450-450=900 units
valued FIFO at =(450 x $69) + (450 x $80) = $67,050

Trea thnx for ur answer now its clear to me also 🙂
August 11, 2012 at 7:28 am #102128
Anonymous
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trea2401 said:
$67,050.
Closing units = 800+500-400+450-450=900 units
valued FIFO at =(450 x $69) + (450 x $80) = $67,050

Anyone Pls explain the reason use 450 x $69 + $450x $80?

Thanks.
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