A company's inventory records report the following:

August 1 Beginning balance 27 units @ $17

August 5 Purchase 22 units @ $16

August 12 Purchase 26 units @ $17

On August 15, it sold 54 units. Using the FIFO perpetual inventory method, what is the value of the inventory at August 15 after the sale?

Closing value of inventory = $357 for 21 units

Explanation:

As for the provided information we have,

Under FIFO method we know,

FIFO means First In First Out, under this the goods bought at earliest are sold earliest.

That means first opening inventory is sold, then the inventory purchased at the earliest.

Now we have,

Opening Inventory = 27 units @ $17 = $459

Purchases:

Aug 5 22 units @ $16 = $352

Aug 12 26 units @ $17 = $442

Provided 54 units are sold on Aug 15, that means, opening inventory of 27 units, 22 units bought on Aug 5, and 54 - 27 - 22 = 5 units from purchases on Aug 12.

Therefore, after sale units left = 26 - 5 = 21 units

Thus, closing value of inventory = $357 for 21 units