Question

Pam’s Creations had the following sales and purchase transactions during Year 2. Beginning inventory consisted of 270 items at $95 each. The company uses the FIFO cost flow assumption and keeps perpetual inventory records.
  

Date	Transaction	Description
Mar. 5	Purchased	250 items @	$	105
Apr. 10	Sold	145 items @	$	205
June 19	Sold	265 items @	$	205
Sept. 16	Purchased	200 items @	$	110
Nov. 28	Sold	135 items @	$	210

Problem 5-20A Part c

c. Determine the ending inventory balance Pam’s Creations would report on the December 31, Year 2, balance sheet.
  

Answer 1

Cost of Merchandise sold Schedule
First-in-first-out Method [FIFO]
Date	Goods Purchased	Cost of goods sold	Inventory Balance
Qty Purchased	Cost per unit	Total Cost	Qty Sold	Cost per unit	Cost of goods sold	Inventory Qty	Cost per unit	Total Cost
Beg.							270	95	25,650
Mar 05	250	105	26,250				270	95	25,650
							250	105	26,250
Apr 10				145	95	13,775	125	95	11,875
							250	105	26,250
June 19				125	95	11,875	110	105	11,550
				140	105	14,700
Sep 16	200	110	22,000				110	105	11,550
							200	110	22,000
Nov 28				110	105	11,550	175	110	19,250
				25	110	2,750
TOTAL						54,650	175		19,250

“Hence, the ending inventory balance Pam’s Creations would report on the December 31, Year 2, balance sheet will be $19,250”