Question

Shown below is activity for one of the products of Broken Bow Office Equipment:

Units Cost/Unit Total Cost
January 1 balance 500 $55 $27,500
Purchases:
10-Jan 500 60
20-Jan 1,000 63

Sales:
12-Jan 800
28-Jan 750

Required:
Compute the January 31 ending inventory and cost of goods sold for January,
assuming Broken Bow uses the FIFO inventory method.

Use the Excel file template provided.

Answer 1

Date	Purchase	Sold	Balance
January 1	500*$55= $27,500		500*$55=$27,500
January 10	500*$60 = $30,000		500*$55=$27,500 500*$60=$30,000
January 12		500*$55= $27,500	500*$60=$30,000
		300*$60= $18,000	200*$12= $12,000
January 20	1000*$63=$63,000		200*$12=$12,000 1000*$63=$63,000
January 28		200*$12=$12,000 550*$63=$34,650	450*$63=$28,350

Ending inventory = 450*$63 = $28,350

Cost of good sold = $27,500+$18,000+$12,000+$34,650

= $92,150