Question

6 art 1 of 3 Required information Use the following information for the Quick Study below. Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. Also, on December 15, Monson sells 23 units for $30 each. ints Purchases on December 7 Purchases on December 14 Purchases on December 21 13 units @ $12.00 cost 30 units @ $18.00 cost 23 units @ $22.00 cost eBook QS 5-10 Perpetual: Assigning costs with FIFO LO P1 Hint Ask Required: Monson uses a perpetual inventory system. Determine the costs assigned to the December 31 ending inventory based on the FIFO method References Perpetual FIFO: Goods Purchased Cost Per Goods Unit Purchased # of Units Cost of Goods Sold # of Units Cost Per Cost of Unit Sold Goods Sold Inventory Balance Cost Per # of Units Inventory Unit Balance Date December 7 December 14 December 15 December 21 Totals

Answer 1

Answer)

Calculation of Value of Ending Inventory using FIFO Method, Perpetual Inventory System

Date	Goods Purchased	Cost of goods sold	Balance Inventory
Number of Units	Cost per Unit (In $)	Goods Purchased(In $)	Number of Units sold	Cost per Unit (In $)	Cost of Goods Sold (In $)	Number of Units	Cost per Unit (In $)	Inventory Balance (In $)
December'7	13	12.00	156.00				13	12.00	156.00
December'14	30	18.00	540.00				13	12.00	156.00
							30	18.00	540.00
December'15				13	12.00	156.00	20	18.00	360.00
				10	18.00	180.00
December'21	23	22.00	506.00				20	18.00	360.00
							23	22.00	506.00
Total	66		1,202.00	23		336.00	43		866.00

Therefore the cost of ending inventory under FIFO method, perpetual inventory system is $ 866.

Note: Under FIFO Method cost of goods sold and value of ending inventory is calculated assuming that units of inventory which are first bought will be first sold and so on. In the given question, the company sold 23 units on December 15. Using FIFO method, out of these 23 units, 13 units will be from the units purchased on December 7 @ $ 12 per unit and balance 10 units will be from the units purchased on December 14 @ $ 18 per unit.