Logan Company uses a perpetual inventory system on a FIFO basis. Assuming inventory on January 1 was 1,240 units at $7.30 each.

Received	Cost per unit	Sold
Date	Quantity	Date	Quantity
April 15	150	$ 4.30	March 8	610
November 12	1,830	8.30	October 5	310
What is the cost of ending inventory at the end of October 5?

Note: Round your intermediate calculations to the nearest cent and final answer to nearest whole dollar.



To calculate the cost of the ending inventory as of October 5 under a perpetual inventory system using the FIFO (First-In, First-Out) method, we need to:

1. Track the units sold and purchased in chronological order.
2. For sales, remove inventory starting from the oldest available stock (FIFO).
3. Calculate the remaining inventory after each transaction.

### Starting Information:
- **Beginning Inventory (Jan 1)**: 1,240 units at $7.30 each
- **April 15 Purchase**: 150 units at $4.30 each
- **November 12 Purchase**: 1,830 units at $8.30 each (after the October 5 sale, so we ignore this for now)
  
### Sales:
- **March 8 Sale**: 610 units
- **October 5 Sale**: 310 units

#### Step 1: Calculate the inventory after March 8 sale

We begin by selling 610 units on March 8. Under FIFO, we sell the oldest inventory first.

- **Beginning Inventory**: 1,240 units at $7.30 each.

Selling 610 units from the January 1 stock of 1,240 units (at $7.30 each):
- 610 units sold × $7.30 = $4,453 (Cost of goods sold for March 8).
- Remaining inventory = 1,240 − 610 = 630 units at $7.30 each.

#### Step 2: Update inventory after the April 15 purchase

On April 15, Logan Company purchased 150 units at $4.30 each.

- **Inventory after purchase**:
  - 630 units at $7.30 each (from January 1),
  - 150 units at $4.30 each (from April 15).

Total inventory before October 5:
- 630 units at $7.30 = $4,599,
- 150 units at $4.30 = $645.
  
Total inventory cost: $4,599 + $645 = $5,244.

#### Step 3: Calculate inventory after the October 5 sale

Logan Company sells 310 units on October 5. Again, under FIFO, we sell the oldest inventory first:

- First, we sell the 630 units at $7.30, but we only need to sell 310 units.
- 310 units sold from the January 1 inventory (630 units at $7.30):
  - 310 units × $7.30 = $2,263 (Cost of goods sold for October 5).

After this sale, the remaining inventory is:

- **January 1 inventory (after October 5)**: 630 − 310 = 320 units at $7.30 each,
- **April 15 inventory**: 150 units at $4.30 each (no change).

#### Step 4: Calculate the ending inventory on October 5

- 320 units at $7.30 = $2,336,
- 150 units at $4.30 = $645.

Total ending inventory = $2,336 + $645 = **$2,981**.

### Final Answer:
The cost of the ending inventory at the end of October 5 is **$2,981**.

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Would you like more details or have any questions? Here are five related questions:

1. How would the cost of goods sold change if Logan used the LIFO method?
2. What is the impact of using a periodic inventory system instead of a perpetual one?
3. How does FIFO affect financial statements in times of rising prices?
4. How would ending inventory differ if no purchases were made in April?
5. What are the advantages of using a perpetual inventory system?

**Tip:** Keep in mind that FIFO assumes older inventory is sold first, which often results in higher net income in periods of inflation.

Logan Company uses a perpetual inventory system on a FIFO basis. Assuming inventory on January 1 was 1,240 units at $7.30 each.

Received	Cost per unit	Sold
Date	Quantity	Date	Quantity
April 15	150	$4.30	March 8	610
November 12	1,830	$8.30	October 5	310
What is the cost of ending inventory at the end of October 5?

Note: Round your intermediate calculations to the nearest cent and final answer to nearest whole dollar.

Learn how to calculate the ending inventory for Logan Company as of October 5 under a FIFO perpetual inventory system. This solution covers key concepts like FIFO inventory valuation, cost of goods sold (COGS), and detailed step-by-step calculations. Suitable for college or university accounting students.

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