Calculate the Ending Inventory Using FIFO for a Company That

question 98

Essay

Calculate the ending inventory using FIFO for a company that uses a perpetual inventory system,using the information given below.
$$\begin{array} { | l | c | c | } \hline & \text { Units } & \text { Unit Cost } \\\hline \text { Beginning inventory } & 100 & \$ 10 \\\hline \text { Aug. 5 purchased } & 40 & 12 \\\hline \text { Aug. 10 sold } & 60 & - \\\hline \text { Aug. 15 purchased } & 70 & 13 \\\hline \text { Aug. 25 sold } & 50 & - \\\hline\end{array}$$

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Definitions:

Inventory Period

The duration of time it takes for a company to sell its inventory and convert it into sales, often measured in days or months.

Slow-selling Merchandise

Items in inventory that move or sell at a slower pace than anticipated, often leading to excess stock and markdowns.

Cash Cycle

Refers to the amount of time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Selling Inventory

The process of selling goods and products that a company holds in stock, often a major revenue source.