Question

(The following information applies to the questions displayed below.) Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. Monson uses a perpetual inventory system. Also, on December 15, Monson sells 29 units for $50 each. Purchases on December 7 Purchases on December 14 Purchases on December 21 19 units @ $20.00 cost 36 units @ $30.00 cost 29 units @ $36.00 cost Determine the costs assigned to ending inventory when costs are Issigned based on the FIFO method. Perpetual FIFO of Goods Sold Inventory Balance Goods Purchased Cost Per Goods Unit Purchased # of Units # of Units Sold Cost Per Cost of Goods Unit Sold # of Units Cost Per Unit Date Inventory Balance December 7 December 14 December 15

Answer 1

Date Dec-07 Purchases Dec-14 Purchases Perpetual FIFO Goods Purchased Cost of Goods sold Units Unit Cost Total Cost Units Unit Cost Total Cost 191 @ 20 = 380 36 @ 301 = 1080 Inventory Balance Units Unit Cost Total Cost 19 @ 201 = 380 19 @ 20 = 380 361 @ 30 1080 55 14601 26 @ 301 = 780 0 Dec-15 Sales 19 @ 20 = 301 = 3801 300 101 @ 29 6801 26 Dec-21 Purchases 29 @ 36 = 1044 26 @ 29 @ 30 = 36 = 780 780 1044 Totals 84 2504 29 680 55 1824

Explanation:

Purchases:

Dec 07 : 19 units * $20 = $380

Dec 14: 36 units * $30 = $1080

Dec 21: 29 units * $36 = $1044

Total Purchases for 84 units = $2504 ($380 + 1080 + 1044)

Sales:

Being it's FIFO Method

Dec 15 : 19 units * $20 = $380

10 units * $30 = $300

Total Sales for 29 units =  $680 ($380 + 300)

Cost of goods sold = $680

Ending inventory :

Dec 14 : 26 units * $30 = $780

Dec 21: 29 units * $36 = $1044

Total Ending inventory for 66 uniits = $1824 ($780 + $1044)