Waterway Company uses a periodic inventory system. Details for the inventory account for the month of January, 2020 are as follow Per Unit Price Units Total Balance, 1/1/20 150 $4 $600 Purchase, 170 5.50 935 1/15/20 Purchase, 170 5.40 918 1/28/20 An end of the month (1/31/20) inventory showed that 230 units were on hand. If the company uses FIFO, what is the value of the ending inventory? O $920 O $1248 O $1090 O $1240

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Inventory Valuation

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 the market with the motive of earning profit.