Question

Boxwood Company sells blankets for $37 each. The following was taken from the inventory records during May.  The company had no beginning inventory on May 1.

Date	Blankets	Units	Cost
May 03	Purchase	6	$18
10	Sale	3
17	Purchase	9	$17
20	Sale	4
23	Sale	2
30	Purchase	9	$18

Assuming that the company uses the perpetual inventory system, determine the gross profit for the sale of May 23 using the FIFO inventory cost method.

a.$40

b.$74

c.$24

d.$108

Answer 1

Inventory on Hand Perpetual : FIFO ( First In First Out) Purchases Cost of Goods Sold Unit Qty Unit Date Cost total cost sold Cost total cost Qty May-03 May-10 3 18.00 54 May-17 917153 II Qty Unit Cost total Cost 108 3 18 54 May- 20 3 8 17 153 136 1 2 17 51 17 17 17134 May-23 May-309 18 162 6 136 102 17 18 | 162 9 15 Balance | 156 264 74 | 9 Gross Profit on May 23 Sales Sales Revenue =2*37 Less Cost of Goods Sold Answer:Gross Profit Answer: A) $40 34