Question

I don't understand where they are getting the 5 bikes, 35 bikes and 12 bikes. I underlined the parts I'm confused about. If they were to ask you for net income or gross profit from this how would you calculate it? Thanks!

First-In, First-Out First-in, first-out (FIFO sales occur, the costs of the earlie the costs from them first-out (FIFO) assumes that inventory items are sold in the order acquired. When the costs of the earliest units acquired are charged to cost of goods sold. This leaves ots from the most recent purchases in ending inventory. hit 65 starts with beginning inventory of 10 bikes at $91 each. Exhibit o.Start August 3 Purchase August 14 Sold 20 & Purchased 15 bikes costing $106 each for $1.590. Inventory now consists of 10 bikes at at $91 each and 15 bikes at $106 each, for a total of $2,500. Sold 20 bikes-applying FIFO, the first 10 sold cost $91 each and the next old cost $106 each, for a total cost of $1,970. This leaves 5 bikes costing $106 each, or $530, in inventory. munust 17 Purchased 20 bikes costing $115 each, and on August 28, purchased another 10 bikes costing $119 each, for a total of 35 bikes costing $4,020 in inventory. August 30 Sold 23 bikes—applying FIFO, the first 5 bikes sold cost $106 each and the next 18 sold cost $115 each, for a total of $2,600. This leaves 12 bikes costing $1,420 in ending inventory. Date Goods Purchased Cost of Goods Sold Inventory Balance Aug. 1 Beginning balance = $ 910 10 @ $ 91 10 @ $ 91 15 @ $106 Aug. 3 15 @ $106 = $1,590 = $2,500 Aug. 14 10 @ $ 91 = $ 910 10 @ $106 = $1,060 = $1,970 5 @ $106 = $ 530 Aug. 17 20 @ $115 = $2,300 5 @ $106 20 @ $115 = $2,830 Aug. 28 10 @ $119 = $1,190 5 @ $106 20 @ $115 10 @ $119 = $4,020 Aug. 30 5 @ $106 = $ 530 18 @ $115 = $2,070 = $2,600 2 @ $115 10 @ $119 = $1,420 $4,570

Answer 1

I Have explained clearly If you have any doubts regardibg this answer please comment below

FIFO A Augs Begining Inventory = 10 + 891 910 Puchares = 154106 = 1590 closing 4 - 25 2500 sales sourits = 10x al = 910 Jo lo lo y 106 = 1060 Lext 14 Aug x4X1062 5x 106 = 530 closing (95-20) = Aug 17 Add purchases . = 20x115 = 2800 = 10 * 119 = 1190 10x119 20x115 35 4020 closing (5+20+10) Lees! Aug3o Sales 23 S4106 184115 = 57106 = 530 = 18x115 = 2070 2600 23 Closing (85-23 ) = 2 x 115 = 230 10x119 = 1990 1420 Goues poofft - Sales - COGS. cobs = opening stock y purchases - closing stock = 410 tasoo 14020 -1420 - 910 + 1590 + 2300 +1190 - 1420 -4570 GROSSPROFIT = 4570 - 4570=04