A Corporation Uses a FIFO Perpetual Inventory System

question 102

Multiple Choice

A corporation uses a FIFO perpetual inventory system. August 2, 25 units were purchased at $12 per unit.
August 5, 10 units were purchased at $13 per unit.
August 15, 12 units were sold at $25 per unit.
August 18, 15 units were purchased at $14 per unit.
What was the amount of the ending inventory for the month of August?

• A)$496.00
• B)$486.00
• C)$492.57
• D)$300.00
• E)$510.00

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Definitions:

Operating Activity

Activities directly related to the primary business operations of a company, including production, distribution, and sales of goods and services.

Payment Of Dividends

The distribution of a portion of a company's earnings to its shareholders, usually in the form of cash or additional shares.

Interest Expense

The expense that an entity has to bear for the money it borrows over a certain duration.

Preferred Stock

A type of stock that offers dividends at a fixed rate and has priority over common stock in the distribution of assets during a company's liquidation.