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Accounting- Perpetual Inventory using FIFO?
........... Purchases...........Sales
-----Units----Unit Cost----Units---Selling Price/Unit
3/1----100---$50
3/3-----60----$60
3/4-------------------------70----$100
3/10---200---$70
3/16----------------------- 80----$110
3/19------------------------80----$110
3/25------------------------50-$110
3/30---40-----$75
Instructions
Using the inventory and sales data above, calculate the value assigned to cost of goods sold in March and to the ending inventory at March 31. (using FIFO and perpetual inventory system)
My question: I'm not so sure how to do the ending inventory..can anyone here guide me?
@ H.R
I thought your method is periodic inventory?
1 Answer
- 1 decade agoFavorite Answer
The question mentions no starting inventory, so you have to assume that the only inventory is what was purchased in March. Therefore, the total inventory = 100+60+200+40 = 400 units.
The number of units sold in March = 70+80+80+50 = 280.
Using FIFO, the cost of the 280 units sold = 100@$50 + 60@$60 + 120@$70 = $17,000.
400 - 280 = 120 units ending inventory, with value = 80@$70 + 40@$75 = $8,600.
