Question

During the year, Wright Company sells 495 remote control airplanes for $100 each. The company has the following inventory purchase transactions for the year. Date Jan. 1 May 5 Nov. 3 Transaction Beginning inventory Purchase Purchase Number of Units 50 275 225 Unit Cost Total Cost $67 $ 3,350 70 19,250 75 16,875 550 $ 39,475 USA Calculate ending inventory and cost of goods sold for the year, assuming the company uses FIFO. FIFO Cost of Goods Sold Ending Inventory Cost of Goods Available for Sale Average Cost of Goods # of units Cost per Available unit for Sale Average Cost of # of units Cost per Goods unit Sold Average Ending # of units Cost Inventory per unit Beginning Inventory < Prey 16 of 50 Next > o search o

Answer 1

Solution We are asuming that the sale are mdae on December 31, 2000 Date Cost of goods available for sale Units Cost Total cost Cost of goods sold Units Cost Ending Inventory Units Cost Total cost Total cost 50 $ Beginning Inventory 5-May-oo $ $ 67 $ 70 $ 3.350 19,250 o o plus 275 $ $ S $ $ $ 3-Nov-oo 225 $ 75$ 16,875 o 50 50 275 50 275 225 55 $ 67 $ 67 $ 70 $ 67 $ 70 $ 75 S 75 S 3.350 3.350 19,250 3.350 19.250 16,875 4,125 31-Dec-oo 0 S 67 $ 50 275 170 S S S 70 $ 75 3.350 19,250 12.750 35,350 495 55 $ 4,125 Cost of goods sold using FIFO method is $35.350 Statement showing computation of Gross profit Particulars Amount Sales Value $ 49,500 (495 units x $100) Less: Cost of goods sold $ (35.350) Gross Profit $ 14,150 Conclusion Hence the cost of goods sold is $35,350 and the ending value of inventory is $4,125