Question

Use the following information for the month of July for questions 33-36 ABC Inc. uses the FIFO cost method in a perpetual inventory system. Jul I Beginning inventory 20 units @ $19 per unit Purchases 7 70 units @ $20 per unit Jul Jul Sales Sales 8 50 units 25 units Jul 50 units @ $22 per unit Jul 10 Purchases Sales 40 units Jul 22 33. The cost of goods sold for the July 8 sale was (a) $950. (b) $980. (c) $989. (d) $1,000.

Answer 1

Date	Available for sale				Cost of goods sold			Ending Inventory
	Description	Units	Unit cost	Total Cost	Units	Unit cost	Total Cost	Units	Unit Cost	Total Cost
July 1	Beginning							70	20	1,400
July 7	Purchase	70	20	1,400				20	19	380
								70	20	1,400
July 8	Sales				20	19	380
					30	20	600	40	20	800
July 9	Sales				25	20	500	15	20	300
July 10	Purchase	50	22	1,100				15	20	300
								50	22	1,100
July 22	Sales				15	20	300
					25	22	550	25	22	550
Total							$2,330

33.

The cost of goods sold for the July 8 = 20 x 19 + 30 x 20

= 380+600

= $980

Correct option is b.

34.

Cost of goods sold for July 9 = 25 x 20

=$500

Correct option is d.

35.

Total Cost of goods sold for the month of July = $2,330

Correct option is a.

36.

Ending inventory July 31 = 25 x 22

=$550

Correct option is d.

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