Question

Beginning inventory, purchases, and sales data for tennis rackets are as follows:

April	3		Inventory	19 units	@	$14
	11		Purchase	13 units	@	$15
	14		Sale	23 units
	21		Purchase	11 units	@	$17
	25		Sale	12 units

Complete the inventory cost card assuming the business maintains a perpetual inventory system and determine the cost of goods sold and ending inventory using FIFO.

	Purchases				Cost of Goods Sold				Inventory
Date	Qty.	Unit Cost	Total Cost		Qty.	Unit Cost	Total Cost		Qty.	Unit Cost	Total Cost
April 3										$	$
11		$	$							$	$
										$
14						$	$			$	$
						$
21		$	$							$	$
										$
25						$	$			$	$
						$
					Total Cost of goods sold		$		Ending inventory value		$

Answer 1

The cost of goods sold and ending inventory using FIFO is calculated as follows:

Date			Purchase			Sale			Ending Inventory
		Units	Rate	$	Units	Rate	$	Units	Rate	$
April 3	Inventory							19	14	266
April 11	Purchase	13	15	195				19	14	266
								13	15	195
April 14	Sale				19	14	266	9	15	135
					4	15	60
April 21	Purchase	11	17	187				9	15	135
								11	17	187
April 25	Sale				9	15	135	8	17	136
					3	17	51

1) Ending inventory using FIFO is $136

2) Cost of goods sold = Begining Inventory + Purchases - Ending inventory

                                   = $266 + ($195 + $187) - $136

                                   = $266 + $382 - $136

                                    = $512

Cost of goods sold using FIFO is $136