Harding Systems, Inc. uses a periodic inventory system. The purchases of a particular product during the year are shown below: Jan. 1 Feb. 7 July 10 Nov. 25 Beginning inventory 1,100 units @ $7.25 $ 7,975 Purchase 1,450 units @ $7.50 10,875 Purchase 1,600 units @ $8.00 12,800 Purchase 1,000 units @ $8.50 8,500 Total 5,150 $ 40,150 At December 31 the ending inventory consisted of 1,500 units. Refer to the information above. Compute the cost of the ending inventory based on the FIFO method of inventory valuation. Multiple Choice $12,500. $29,175. $10,975. $27,650.
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This method assumes that the oldest inventory items are sold first, so the cost of the ending inventory is based on the prices of the most recent purchases. Show more…
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