If 9,000 units are on hand at December 31, what is the cost of the ending inventory under FIFO?                                         Units                        Unit CostInventory, Jan. 1               8,000                              $11Purchase, June 19             13,000                            $12Purchase, Nov 8                5,000                              $13

Question
Asked Mar 31, 2019

If 9,000 units are on hand at December 31, what is the cost of the ending inventory under FIFO?

                                         Units                        Unit Cost

Inventory, Jan. 1               8,000                              $11

Purchase, June 19             13,000                            $12

Purchase, Nov 8                5,000                              $13

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Expert Answer

Step 1

Inventory Valuation under FIFO:

"FIFO" stands for first-in, first-out, meaning that the oldest inventory items are recorded as sold first. The cost associated with the inventory that was purchased first is the cost expensed first. With FIFO, the cost of inventory reported on the balance sheet represents the cost of the inventory most recently purchases.

Step 2

Computation of Cost of Ending Inventory:

As mentioned above, the Cost of ending invento...

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