Question

ABC company has the following inventory information. What amount is the ending inventor cost of goods sold if FIFO is used? Quantity Price 1-Jun Beginning Inventory 20 2 8-Jun Purchase 15 3 14-Jun Sale 25 7 20-Jun Purchase 20 4 Select one: O a. 55 O b. 170 O c. 70 O d. 110

Answer 1

Answer

• Working

FIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	20	$                   2.00	$                              40.00	20	$                 2.00	$                       40.00	0	$                   2.00	$                         -
Purchases:
08-Jun	15	$                   3.00	$                              45.00	5	$                 3.00	$                       15.00	10	$                   3.00	$                  30.00
20-Jun	20	$                   4.00	$                              80.00	0	$                 4.00	$                              -	20	$                   4.00	$                  80.00
TOTAL	55		$                            165.00	25		$                       55.00	30		$                110.00

• Question is very unclear if it wants ‘Ending Inventory’ or ‘Cost of Goods Sold’. Hence I’ve calculated both above.
• Ending Inventory = $ 110
• Cost of Goods Sold = $ 55