Question

Beginning inventory, purchases, and sales for an inventory item are as follows: Sep. 1 Beginning Inventory 24 units @ $15 5 Sale 14 units 17 Purchase 26 units @ $17 30 Sale 27 units Assuming a perpetual inventory system and the first-in, first-out method: a. Determine the cost of the goods sold for the September 30 sale. b. Determine the inventory on September 30.

Answer 1

FIFO - First in First which are purchased first. out, the goods first are sold Choop to to Sale on 5th Sep is out of goods available from opening inventory, since they are purchased first cost of sales = 14 x $15 goods 30th Sep is out of from = $210 Sale on available opening inventory - 10 units out of purchases - 17 units cost = (lox $15) + (17 x$17) = $439 Total cost of goods sold $ 439+210 1$ 649

for 20th Cent Answers a) cost of goods sold sale is 1$ 439 I b Ending inventory on 30th sep = 9x 17 = $153 q units are left in ending inventory which are purchased on 17th September @ $17