Question

April 3 Inventory 11 Purchase 14 Sale 21 Purchase 25 Sale 21 units @ $14 15 units @ $14 26 units 13 units @ $22 13 units Complete the inventory cost card assuming the business maintains a perpetual determine the cost of goods sold and ending inventory using FIFO.

Answer 1

Assume that there is no opening balance in inventory Perpetual accounting system means the company is maintaining and updating the inventory records as and when there is change in inventory FIFO (First In First Out) as the name suggests, under this system the inventory that is purchased first will be sold first Date Purchase Sell Balance Amt($) Amt($) Amt($) Qty Rate($) (Qty*rate) Qty Rate($) (Qty*rate) Qty Rate($) (Qty*rate) 3 21 14 294 21 14| 294 11 15 14 2 10 36 14 504 14 26 14 364 10 14 211322286 1 0 14 140 1 13 22 140 25 10 14 140 3 22661022 220 49 79039 5 701022220 140 Total Therefore, The cost of goods sold is $570 The closing inventory is 10 units @ rate 22 per unit amounting to $220.