Question

Biscuit Bakery had the following activity in its inventory account during August 20X3.

                                                                                                                        Cost per

Date                      Activity                                               Units              Unit Cost            Total

August 1            Beginning inventory                          100                    $3.00               $300

August 3            Purchase                                                   40                       3.10                124

August 7            Sale                                                             50

August 12          Purchase                                                   50                       3.20                 160

August 16          Sale                                                             70

August 23          Sale                                                             40

August 30          Purchase                                                   60                       3.30                 198

What is the ending inventory balance at August 31, 20X3, for Biscuit Bakery if the company uses perpetual FIFO as its inventory valuation method?

A) $198.00

B) $270.00

C) $294.00

D) $297.50

E) $358.00

Note: Please show math for answer.

Answer 1

	Purchases	Cost of goods sold	Ending inventory
Date	Units	Unit cost	Total cost	Units	Unit cost	Total cost	Units	Unit cost	Total cost
Aug. 1							100	3	300
Aug. 3	40	3.10	124				100	3	300
							40	3.10	124
Aug. 7				50	3	150	50	3	150
							40	3.10	124
Aug. 12	50	3.20	160				50	3	150
							40	3.10	124
							50	3.20	160
Aug. 16				50	3	150	20	3.10	62
				20	3.10	62	50	3.20	160
Aug. 23				20	3.10	62
				20	3.20	64	30	3.20	96
Aug. 30	60	3.30	198				30	3.20	96
							60	3.30	198
Total									294

·

· Ending inventory = $294

Correct option is (C)

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