Question

Malcom, Inc. had the following balances and transactions during 2017:

Beginning Merchandise Inventory as of January 1, 2017	150 units at $81
March 10	Sold 60 units
June 10	Purchased 270 units at $85
October 30	Sold 210 units

What would be reported as Cost of Goods Sold on the income statement for the year ending December 31, 2017 if the perpetual inventory system and the first-in, first-out inventory costing method are used?

Group of answer choices

$12,150

$17,490

$35,100

$22,350

Answer 1

Ans.	Option   4th $22,350
	Perpetual FIFO:
	Purchase				Cost of goods sold			Balance
	Date	Quantity	Rate	Total cost	Quantity	Rate	Total cost	Quantity	Rate	Total cost
	1-Jan	150	$81.00	$12,150				150	$81.00	$12,150
	10-Mar				60	$81.00	$4,860	90	$81.00	$7,290
	10-Jun	270	$85.00	$22,950				90	$81.00	$7,290
								270	$85.00	$22,950
	30-Oct				90	$81.00	$7,290
					120	$85.00	$10,200	150	$85.00	$12,750
	Total				Cost of goods sold		$22,350	Ending inventory		$12,750
	*In FIFO method the units that have purchased first, are released the first one and the ending inventory
	units remain from the last purchases.