Question

Beginning inventory, purchases, and sales data for tennis rackets are as follows:

Apr. 3	Inventory	19 units @	$14.00
11	Purchase	16 units @	$19.00
14	Sale	12 units
21	Purchase	9 units @	$17.00
25	Sale	16 units

Assuming the business maintains a perpetual inventory system, calculate the cost of merchandise sold and ending inventory using FIFO.

Select the correct answer.

cost of merchandise sold $286.00 and ending inventory $437.00

cost of merchandise sold $437.00 and ending inventory $286.00

cost of merchandise sold $437.00 and ending inventory $723.00

cost of merchandise sold $723.00 and ending inventory $286.00

Answer 1

Solution:

D L E F G K м 44 45 46 47 48 Computation of ending inventory and Cost of Goods sold under FIFO (Perpetual) Cost of goods sold Inventory Balan ce Quantity Unit Cost Total Cost $266.00 $266.00 $304.00 49 Goods Purchased Date Quantity Unit Cost 3-Apr 11-Apr Quantity Unit Cost 50 Total Cost Total Cost $14.00 51 19 $304.00 $19.00 $14.00 52 16 19 $19.00 53 16 54 $168.00 $14.00 $14.00 $19.00 $98.00 55 14-Apr 12 $304.00 56 16 57 21-Apr $153.00 $14.00 $19.00 $17.00 $98.00 $304.00 $17.00 58 59 16 $153.00 60 61 $133.00 $153.00 25-Apr $14.00 $19.00 $98.00 $19.00 $17.00 62 7 $171.00 63 9 9 64 $286.00 16 28 $437.00 65 Total 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 Sheet178 (3) Sheet178 (2) Sheet178 Sheet214 Sheet II

Hence second option "cost of merchandise sold $437.00 and ending inventory $286.00" is correct.