Question

Baldwin Company had the following balances and transactions during 2019 Beginning Merchandise Inventory as of January 1, 2019 100 units at $81 March 10 Sold 70 units June 10 Purchased 200 units at $34 October 30 Sold 170 units What would be reported as Cost of Goods Sold on the income statement for the year onding December 31, 2019 if the perpetual invertory system and the first in first-out inventory costing method are used? O A. $19,860 OB. $8.100 OC. $24.900 OD. $14,190

Answer 1

Answer

• Correct Answer = Option ‘A’ $ 19,860 = Cost of Goods Sold

Perpetual FIFO:	Cost of Goods Available for Sale			Cost of Goods Sold – Mar 10			Cost of Goods Sold – Oct 30			Inventory Balance
	# of units	Cost per unit	Cost of Goods Available for Sale	# of units sold	Cost per unit	Cost of Goods Sold	# of units sold	Cost per unit	Cost of Goods Sold	# of units in ending inventory	Cost per unit	Ending Inventory
Beg. Inventory	100	$81.00	$8,100	70	$81.00	$5,670	30	$81.00	$2,430	-	$81.00	$0
Purchases:
Jun-10	200	$84.00	$16,800	-	$84.00	$0	140	$84.00	$11,760	60	$84.00	$5,040
Total	300		$24,900	70		$5,670	170		$14,190	60		$5,040

• Cost of Goods Sold = 5670 + 14190 = $ 19,860