Question

Altira Corporation provides the following information related to its merchandise inventory during the month of August 2021:

Aug.1	Inventory on hand—3,100 units; cost $7.20 each.
8	Purchased 15,500 units for $6.60 each.
14	Sold 12,400 units for $13.10 each.
18	Purchased 9,300 units for $5.80 each.
25	Sold 11,400 units for $12.10 each.
28	Purchased 5,100 units for $5.80 each.
31	Inventory on hand—9,200 units.

1. Using calculations based on a perpetual inventory system, determine the inventory balance Altira would report in its August 31, 2021, balance sheet and the cost of goods sold it would report in its August 2021 income statement using the FIFO method.

Answer 1

Answer-1)-Ending inventory balance on August 31,2021 reported in Balance sheet =$53360.

Cost of goods sold on August 31,2021 reported in Income statement =$154780.

Explanation-

FIFO Method
	Goods purchased		Cost of goods sold			Inventory balance
Date	# of units	Cost per unit	# of units sold	Cost per unit	Cost of goods sold	# of units	Cost per unit	Inventory balance
Aug-01						3100	7.20	22320
Aug-08	15500	6.60				3100	7.20	22320
						15500	6.60	102300
Aug-14			3100	7.20	22320	6200	6.60	40920
			9300	6.60	61380
Aug-18	9300	5.80				6200	6.60	40920
						9300	5.80	53940
Aug-25			6200	6.60	40920	4100	5.80	23780
			5200	5.80	30160
Aug-28	5100	5.80				4100	5.80	23780
						5100	5.80	29580
Totals			23800		154780	9200		53360