Question

Question 2 (3 points) X Company had the following purchases and sales of merchandise inventory for the month: January 1: purchased te units at $120 January 15 purchased 20 units at $140 January 25 sold 20 units at retail price of $150 Using the FIFO method, the cost of the ending Inventory on January 31 is Blank 1:

Answer 1

Answer:
Cost of Goods available for sale = (10 Units * $120) + (20 Units * $140)
Cost of Goods available for sale = $1,200 + $2,800
Cost of Goods available for sale = $4,000

Cost of Goods sold = (10 Units * $120) + (10 Units * $140)
Cost of Goods sold = $1,200 + $1,400
Cost of Goods sold = $2,600

Cost of Ending Inventory = Cost of Goods available for sale - Cost of Goods sold
Cost of Ending Inventory = $4,000 - $2,600
Cost of Ending Inventory = $1,400