Question

Batly Corporation has the following inventory items and costs for the month.
1 unit purchased Jan 15 at a cost of $46.
1 unit purchased Jan 20 at a cost of $52.
1 unit purchased Jan 24 at a cost of $59
On January 26, the company sold 2 units for $70 each. The company uses the FIFO (First In First Out) inventory method.

1. What is the Cost of Goods Sold for the month? $

2. What is Gross Margin for the month? $

3. What is ending inventory for the month? $

Answer 1

	Goods Available for sale			Cost of Goods Sold			Ending Inventory
Date	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
Jan.15	1	$46	$46	-	-	-	1	$46	$46
Jan.20	1	$52	$52	-	-	-	1	$46	$46
							1	$52	$52
Jan.24	1	$59	$59	-	-	-	1	$46	$46
							1	$52	$52
							1	$59	$59
Jan.26				1	$46	$46
				1	$52	$52	1	$59	$59
Total	3		$157	2		$98	1		$59

1-Computation of cost of goods sold for the month:-

Cost of goods sold
Cost of goods available for sale	$157
Less: Ending Inventory	$59
Cost of goods sold	$98

2-Computation of gross margin for the month:-

Sales (2 units *$70 each)	$140
Less: Cost of goods sold	$98
Gross Marin	$42

3- Ending inventory for the month:-

Ending inventory
Total Purchase	3 units
Sold Units	2 units
Ending Inventory	1 unit

1 unit @$59= $59