Question

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		$

Answer 1

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

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