Question

Use the following information for the Quick Study below.

Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. Also, on December 15, Monson sells 28 units for $25 each.
  

Purchases on December 7	18 units @ $10.00 cost
Purchases on December 14	35 units @ $15.00 cost
Purchases on December 21	28 units @ $18.00 cost

QS 6-10 Perpetual: Assigning costs with FIFO LO P1

Required:
Monson uses a perpetual inventory system. Determine the costs assigned to the December 31 ending inventory based on the FIFO method.

Answer 1

Using FIFO method under perpetual inventory method.

Date	Purchases	Sales	Balance
December 7	18 units * $10 = $180		18 units * $10 = $180
December 14	35 units * $15 = $525		18 units * $10 = $180 35 units * $15 =$525
December 15		18 units * $10 = $180 10 units * $15 = $150	25 units * $15 = $375
December 21	28 units * $18 = $504		25 units * $15 = $375 28 units * $18 = $504
Total	$1,209	$280	$ 879

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