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Benson Company had beginning inventory of 150 units that cost $200 each. During the year, Benson made two inventory purchases: Purchase 1 for 500 units that cost $210 each and Purchase 2 for 350 units that cost $220 each. During the year, Benson sold 700 units. If Benson uses FIFO, the reported ending inventory equals
a. $61,500 Reason: Beginning inventory (150 units * $200 each) + Purchase 1(500 units $210 each) + Purchase 2 (50 units * $220) = $146,000 Cost of goods sold; $212,000 cost of goods available for sale - $146,000 cost of goods sold = $ 66,000
b. $63,600 Reason: Beginning inventory (150 units * $200 each) + Purchase 1(500 units * $210 each) + Purchase 2 (50 units * $220) = $146,000 Cost of goods sold; $212,000 cost of goods available for sale - $146,000 cost of goods sold = $66,000
c. $66,000 Reason: Beginning inventory (150 units * $200 each) + Purchase 1 (500 units $210 each) + Purchase 2 (50 units * $220) = $146,000 Cost of goods sold; $212,000 cost of goods available for sale - $146,000 cost of goods sold = $66,000
d. $212,000 Reason: Beginning inventory (150 units * $200 each) + Purchase 1 (500 units * $210 each) + Purchase 2 (50 units * $220) = $146,000 Cost of goods sold; $212,000 cost of goods available for sale - $146,000 cost of goods sold = $66,000

Sagot :

The ending inventory is  $66,000 Reason: Beginning inventory (150 units * $200 each) + Purchase 1 (500 units $210 each) + Purchase 2 (50 units * $220) = $146,000 Cost of goods sold; $212,000 cost of goods available for sale - $146,000 cost of goods sold = $66,000

What is the FIFO inventory method?

FIFO means first in, first out. It means that it is the first purchased inventory that is the first to be sold. The ending inventory would consist of goods purchased last.

Ending inventory = 150 + 500 + 350 - 700 = 300.

The ending inventory would be taken from the second purchase.

Ending inventory = 300 x $220 = $66,000

To learn more about FIFO, please check: https://brainly.com/question/294129

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