Marigold uses the periodic inventory system. For the current month, the beginning inventory consisted of 7200 units that cost $13.00 each. During the month, the company made two purchases: 3000 units at $14.00 each and 11900 units at $14.50 each. Marigold also sold 12800 units during the month. Using the FIFO method, what is the ending inventory? $123000. $134850. $120900. $129645.
Marigold uses the periodic inventory system. For the current month, the beginning inventory consisted of 7200 units that cost $13.00 each. During the month, the company made two purchases: 3000 units at $14.00 each and 11900 units at $14.50 each. Marigold also sold 12800 units during the month. Using the FIFO method, what is the ending inventory?
Inventory: It refers to the items held by an organization which were in various forms like raw material, work-in process, and finished goods. The inventory is generally held for resale or to use in the production process.
Periodic inventory system: Under this inventory system, the records of inventory are only updated at the end of the period. All the purchases are recorded by using a purchases account and any returns are recorded using a purchase returns and allowances account.
First-in-first out method: Under this method, the inventory is used or sold which first arrives in the stock point. Thus, the value of the cost of goods sold is the cost of earlier purchased goods and the cost of ending inventory is the cost of recently purchased goods.
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