Question

Pronghorn Company uses a periodic inventory system. For April, when the company sold 400 units, the...

Pronghorn Company uses a periodic inventory system. For April, when the company sold 400 units, the following information is available.

 Units Unit Cost Total Cost April 1 inventory 220 \$11 \$ 2,420 April 15 purchase 450 13 5,850 April 23 purchase 330 14 4,620 1,000 \$12,890

Compute the April 30 inventory and the April cost of goods sold using the FIFO method.

 Ending inventory \$ Cost of goods sold \$

Based on the information available in the question, we can calculate the April 30 inventory and cost of goods sold using the FIFO method as follows:-

 Particulars Units Unit Cost Total Cost April 1 Inventory 220 11 2,420 April 15 Purchase 450 13 5,850 April 23 Purchase 330 14 4,620 Total 1,000 \$12,890

The company sold 400 units and since the company follows the FIFO method , the 400 units are first disbursed from the April 1 inventory and the remaining from April 15/April 23 purchases as required

220 units * 11 per unit = \$2,420

180 units * 13 per unit = \$2,340

Cost of Goods sold = \$4,760

Ending inventory:-

270 units (450 units - 180 units sold) * \$13 per unit = \$3,510

330 units * \$14 per unit = \$4,620

Ending Inventory = \$8,130

All the best and please let me know if you have any questions via comments :)

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