Use the following information to answer the next two questions. ABC Company's beginning inventory on January 1, 2022 consisted of 1,000 units costing $1.50 per unit. ABC's inventory records for 2022 revealed the following: Quantity Cost 2,500 $3,750 January 25 February 15 March 21 4,000 8,000 3,000 7,500 April 5 April 20 May 20 July 22 September 10 October 14 November 10 2,100 8,925 Sales during the period consisted of 8,200 units, made at a selling price of $4.25 per unit. 1,500 4,500 Quantity Sales 3,200 9,600 800 $3,400 1,500 6,375 2,500 10,625 1,300 5,525 Assuming the use of the perpetual first-in, first-out inventory costing method, the ending inventory would be: Assuming the use of the perpetual last-in, first-out inventory costing method, gross profit would be:

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in…