Question

Date			Activities	Units Acquired at Cost								Units sold at Retail
Jan.	1		Beginning inventory	190	units	@	$	7.00	=	$	1,330
Jan.	10		Sales										150	units	@	$	16.00
Jan.	20		Purchase	110	units	@	$	6.00	=		660
Jan.	25		Sales										130	units	@	$	16.00
Jan.	30		Purchase	280	units	@	$	5.50	=		1,540
			Totals	580	units					$	3,530		280	units

The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 300 units, where 280 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory.

Required:
3. Determine the cost assigned to ending inventory and to cost of goods sold using FIFO.

	Perpetual FIFO: Goods Purchased Cost of Goods Sold Inventory Balance Date # of units Cost per unit # of units sold Cost per unit Cost of Goods Sold # of units Cost per unit Inventory Balance January 1 190 @ $7.00 = $1,330.00 January 10 January 20 January 25 January 30 Totals

Answer 1

3. Determine the cost assigned to ending inventory and to cost of goods sold using FIFO.

Perpetual FIFO: Goods Purchased Cost of Goods Sold Inventory Balance Date # of units Cost per unit # of units sold Cost per unit Cost of Goods Sold # of units Cost per unit Inventory Balance January 1 190 @ $7.00 = $1,330.00 January 10 150 @ 7 = 1050 40 @ 7 = 280 January 20 110 @ 6 40 @ 7 = 280 110 @ 6 = 660 150 940 January 25 40 @ 7 = 280 90 @ 6 = 540 20 @ 6 = 120 130 820 20 120 January 30 280 @ 5.50 20 @ 6 = 120 280 @ 5.50 = 1540 300 1660 Totals 1870 1660

Ending inventory = $1660

Cost of goods sold = $1870