Bordeaux Company has the following information related to purchases and sales of one of its inventory items: Description Units Purchased at Cost Units Sold at Retail 150 units @ $7 = $1,050 June 1 Beginning Inventory 9 Purchase 1 200 units @ $12 = $2,400 14 Sale 1 Date 22 Purchase 2 29 Sale 2 250 units @ $14 = $3,500 Assume that Bordeaux uses a perpetual inventory system. 300 units @ $25 225 units @ $25 Required: Calculate the cost of goods sold and the cost of ending inventory using the FIFO inventory costing method. Cost of goods sold Cost of ending inventory $

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.