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Perpetual Inventory Using FIFO
Beginning inventory, purchases, and sales for Item Zeta9 are as follows:

Oct. 1 Inventory 200 units at $30
7 Sale 160 units
15 Purchase 180 units at $33
24 Sale 150 units

Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine (a) the cost of goods sold on October 24 and (b) the inventory on October 31.

Respuesta :

The cost of goods sold on October 24 is $4830

The perpetual inventory as on October 31 is 70 units of value as $2310

Explanation:

The order of events in the given scenario,

  • Oct. 1 - Inventory 200 units at $30
  • Oct. 7 - Sold 160 units
  • Oct. 7 - Remaining Inventory 40 units at $30
  • Oct. 15 - Purchase 180 units at $33
  • Oct. 15 - Total Inventory 40 units at $30 + 180 units at $33
  • Oct. 15 - Total Inventory 220 units and value is $7140 ($30 * 40 + $33 * 180)
  • Oct. 24 - Sold 150 units
  • Oct. 24 - Taken 40 units from the purchase of $30 and 110 units from the purchase of $33 by using FIFO logic
  • Oct. 24 - Total cost of goods sold is $4830

So, cost of goods sold on October 24 is $4830

  • Oct. 24 - Total Inventory 70 units and value is ($7140  - $4830) = $2310

The perpetual inventory value as on October 31 is $2310

a. The cost of goods sold should be $4,830.

b. The ending inventory is $2,310

Calculation of the cost of goods sold and the ending inventory;

Since

a.  

Units sold from Oct. 1 Inventory 40 (200-160)

And, From Oct. 15 Purchase 110 (150-40)

So,

The cost of goods sold on October 24 should be

=(40*30)+(110*33)

= 4830

b  

Inventory on October 31 should be

= (180-110)*33

= 2310

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