[lahlee3]

The data below are for Parrett Enterprises:
Beginning inventory 100 units at $2.00
Purchase—August 250 units at $1.50
Purchase—October 100 units at $3.00
A periodic inventory system is used; ending inventory is 220 units. What is the ending inventory under FIFO?

[pready]

Beginning inventory 100 units plus your purchases of 350 units = 450 units minus your ending inventory of 220 units = 230 units sold.

Now you can calculate for FIFO:
Your first 230 units have been sold so you have to calculate the cost of ending inventory:
Beginning Inventory of 100 units from your 230 units sold leaves 130 units sold to account for.
Purchases in Aug of 250 units less your 130 units sold = 120 units in ending inventory @ $1.50 per unit.
You have accounted for all of your units sold so your Oct purchases of 100 units are part of ending inventory @ $3.00 per unit.

So your ending inventory equals:
Aug purchases of 120 units * $1.50 = $180
Oct purchase of 100 units * $3.00 = $300
$180 + $300 = Ending Inventory of $480 FIFO