Inventory starts with 100 sheets at $18 and another 200 sheets are bought at $21. If 180 sheets are issued under FIFO, what inventory value remains?
Correct Answer
B) $2,520
FIFO issues the first 100 sheets and 80 of the second layer, leaving 120 sheets at $21, or $2,520.
Why This Is the Correct Answer
FIFO issues the first 100 sheets and 80 of the second layer, leaving 120 sheets at $21, or $2,520.
Why the Other Options Are Wrong
Option A: $2,100
$2,100 is below the supported result for fifo ending inventory; it likely uses the wrong base, period, or account bucket.
Option C: $3,480
$3,480 is above the supported result for fifo ending inventory; it likely adds an unsupported amount or compares the wrong financial base.
Option D: $6,000
$6,000 is above the supported result for fifo ending inventory; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Warehouse Clerk money test: bucket before math for fifo ending inventory.
Reference Hint
Open-book path: tab Builder's Guide to Accounting, 2001 to Section Two, Accounting for Materials, Controlling Inventory; use the job ledger figures in the stem and recompute the same accounting measure.
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