Morton Company uses the periodic inventory method and had th

Morton Company uses the periodic inventory method and had the following inventory information available: Units Unit Cost Total Cost 1/1 Beginning Inventory 100 $4 $400 1/20 Purchase 400 $5 2,000 7/25 Purchase 200 $7 1,400 10/20 Purchase 300 $8 2,400 1,000 $6,200 A physical count of inventory on December 31 revealed that there were 350 units on hand. Assume that the company uses the FIFO method. The value of the ending inventory at December 31 is $__________. Fill in the blank with the appropriate amount. Please give your answer in the following format: EXAMPLE: $3,000.

Solution

Calculate value of ending inventory under FIFO :

Units available for sale = 100+400+200+300 = 1000 unit

Cost of goods available for sale = 6200

Ending inventory value = (300*8+50*7) = 2750

The value of ending inventory at december 31 is $2,750.