Question

Beginning inventory, purchases, and sales for an inventory item are as follows:

Sep. 1	Beginning Inventory	26 units	$16
5	Sale	15 units
17	Purchase	29 units	$19
30	Sale	27 units

Assuming a perpetual inventory system and the first-in, first-out method, determine (a) the cost of the goods sold for the September 30 sale and (b) the inventory on September 30.

a. Cost of goods sold	$fill in the blank 1
b. Inventory, September 30	$fill in the blank 2

Answer 1

Solution:

Date	Goods Purchased			Cost of goods sold			Inventory Balance
	Units	Cost per unit	Total Cost	Units	Cost per unit	COGS	Units	Cost per unit	Inventory Balance
1-Sep							26	$16.00	$416.00
5-Sep				15	$16.00	$240.00	11	$16.00	$176.00
17-Sep	29	$19.00	$551.00				11	$16.00	$176.00
							29	$19.00	$551.00
30-Sep				11	$16.00	$176.00	13	$19.00	$247.00
				16	$19.00	$304.00
Total							13		$247.00

a. Cost of goods sold (176+304)	$480
b. Inventory, September 30	$247