### Inventory Costing with FIFO MethodAddison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September.| **Date** | **Activity** | **Quantity** | **Price per Unit** ||----------|--------------|--------------|------------------|| Sep. 1 | Inventory | 20 units | $20 || Sep. 4 | Sold | 10 units | || Sep. 10 | Purchased | 30 units | $25 || Sep. 17 | Sold | 20 units | || Sep. 30 | Purchased | 10 units | $30 |#### Problem Statement:If Addison uses FIFO (First-In, First-Out), the September 30 inventory is:- a. $650- b. $800- c. $700- d. $750#### Explanation:To determine the September 30 inventory using the FIFO method, follow these steps:1. **Initial Inventory:** - 20 units at $20 each = $400 2. **Sales on September 4:** - Sold 10 units from the initial inventory at $20 each. - Remaining inventory: 10 units at $20 each. 3. **Purchases on September 10:** - Purchased 30 units at $25 each. - Remaining inventory: 10 units at $20 each + 30 units at $25 each. 4. **Sales on September 17:** - Sold 20 units: First 10 units at $20 each (all remaining from the initial inventory) and 10 units from the new purchase at $25 each. - Remaining inventory: 20 units at $25 each.5. **Purchases on September 30:** - Purchased 10 units at $30 each. - Remaining inventory: 20 units at $25 each + 10 units at $30 each.**Calculate the remaining inventory value:**- 20 units at $25 = $500- 10 units at $30 = $300- Total remaining inventory value = $500 + $300 = $800Thus, the correct answer is **b. $800**.

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Description: ### Inventory Costing with FIFO MethodAddison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September.| **Date** | **Activity** | **Quantity** | **Price per Unit** ||----------|--------------

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Addison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September. Sep. 1 Inventory 20 units at $20 4 Sold 10 units 10 Purchased 30 units at $25 17 Sold 20 units 30 Purchased 10 units at $30 If Addison uses FIFO, the September 30 inventory is Oa. $650 Ob. $800 Oc. $700 Od. $750

Addison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September. Sep. 1 Inventory 20 units at $20 4 Sold 10 units 10 Purchased 30 units at $25 17 Sold 20 units 30 Purchased 10 units at $30 If Addison uses FIFO, the September 30 inventory is Oa. $650 Ob. $800 Oc. $700 Od. $750

FINANCIAL ACCOUNTING

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Chapter1: Financial Statements And Business Decisions

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