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Shellhammer Company's inventory records show the following data for the month of September: Units Unit Cost Inventory, September 1 100 $3.34 Purchases: September 8 450 3.50 September 18 350 3.70 A physical inventory on September 30 shows 200 units on hand. If the company uses FIFO inventory costing and a periodic inventory system, the the value of ending inventory at the end of September is

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Answer:

Ending inventory $740

Cost of goods sold $2,464

Explanation:

Calculation to determine the value of ending inventory and cost of goods sold if the company uses FIFO inventory costing and a periodicinventory system.

Calculation for the value of ending inventory

Ending inventory of 200 units= 200 x $3.70

Ending inventory of 200 units = $740

Calculation for Cost of goods sold:

Units available for sale= (100 + 450 + 350) = 900

Units sold= 900 – 200 = 700

100 × $3.34 = $ 334

450 × $3.50 =$1,575

150 × $3.70 =$555

Cost of goods sold $2,464

($ 334+$1,575+$555)

Therefore the value of ending inventory is $740 and cost of goods sold if the company uses FIFO inventory costing and a periodicinventory system will be $2,464

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