Question

Ayayai Corp. has the following inventory data:

July 1		Beginning Inventory		38 units at $19		$722
7		Purchases		132 units at $20		2640
22		Purchases		19 units at $21		399
						$3761

A physical count of merchandise inventory on July 30 reveals that there are 47 units on hand. Using the FIFO inventory method, the amount allocated to cost of goods sold for July is

$2859.

$2708.

$2802.

$2774.

Answer 1

Solution Step-1: Calculate the cost of goods available for sale. Particulars Beginning Inventory Purchases Unit cost Total cost Units Date July 1 July 7 July 22 $19 $722 38 $2,640 $20 132 Purchases $21 $399 19 Total $3,761 189 The cost of goods available for sale $3,761 $189 Number of units available for sale Step-2: Calculate the number of units sold Total Units available for sale 189 (47) Less: Ending inventory units Number of units sold 142 Step-3: Calculate the Cost of Goods sold using FIFO inventory method Under FIFO method, inventories first purchased are issued issued We can calculate the Cost of Goods sold under FIFO method as under Units issued Rate COGS $19 $722 38 $20 $2,080 104 $2,802 142 Amount allocated to cost of goods sold $2,802