### FIFO Inventory Costing Method#### OverviewIntercontinental Inc. employs a periodic inventory system. At the close of Year 2, the accounting records provide the following data related to one of its product lines:#### Inventory Details- **For the end of Year 1 (December 31):** - Units: 1,830 - Unit Cost: $6- **For Year 2:** - **Purchase on March 21:** - Units: 6,200 - Unit Cost: $5 - **Purchase on August 1:** - Units: 4,070 - Unit Cost: $3 - **Ending Inventory on December 31:** - Units: 2,910#### Calculation RequirementThe task is to calculate the amount of ending inventory and the cost of goods sold (COGS) using the FIFO (First-In, First-Out) inventory costing method. It is important to round final answers to the nearest dollar amount, avoiding rounding during intermediate calculations.#### Solution- **Ending Inventory:** $2,910- **Cost of Goods Sold (COGS):** $9,190Utilizing the FIFO method involves selling the oldest inventory first. Therefore, calculations must consider the cost implications from the oldest to the newest stock. The provided solution reflects these considerations.

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Description: ### FIFO Inventory Costing Method#### OverviewIntercontinental Inc. employs a periodic inventory system. At the close of Year 2, the accounting records provide the following data related to one of its product lines:#### Inventory Details- **For the

Periodic inventory system: The periodic inventory system records and updates the inventory after…

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Business

Accounting

What is the amount of ending inventory and cost of goods sold under the FIFO inventory costing method?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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