Question

A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 300 units. Ending inventory at January 31 totals 130 units. Beginning inventory on January 1 Purchase on January 9 Purchase on January 25 Units 270 60 100 Unit Cost $ 2.50 2.70 2.84 Required: Assume the perpetual inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on the FIFO method. Perpetual FIFO: Goods purchased Inventory Balance # of units Date Cost per unit Cost of Goods Sold Cost per Cost of Goods Sold # of units # of units Cost per unit Inventory Balance sold unit January 1 January 9 $ 0.00 January 25 January 26 Totals

Answer 1

Perpetual : FIFO (First In First Out) Purchases Cost of Goods Sold | Inventory on Hand Unit Unit total Unit total Date Qty Cost Qty Cost Cost Qty Cost Cost Jan-01 L 270 2.50 675.00 Jan-09 60 2.70 270 2.50 675.00 60 2.70 162.00 330 837.00 Jan-25 100 2.84 T L 270 2.50 675.00 60 2.70 162.00 100 2.84 284.00 430 1121.00 Jan-26 270 2.50 675.00 30 2.70 81.00 30 2.70 81.00 100 2.84 284.00 300 756.00 130 365.00 Totals 300 756.00 130 365.00

Unit Perpetual : LIFO ( Last In First Out) Purchases Cost of Goods Sold Unit total Date Qty Cost Qty Cost Cost Jan-01 | Jan-09 80 3.60 | Inventory on Hand Unit total Qty Cost Cost 350 3.40 1190 350 3.40 1190 80 3.60 288 430 I 1478 350 3.40 1190 80 3.60 288 110 3.70 407 540 1885 150 3.40 510 | Jan-25 110 3.70 | Jan-26 110 80 200 390 3.70 3.60 3.40 4 07 288 680 1375 Totals 150 510