Question

Ace Systems, Inc. uses a perpetual inventory system. The company’s beginning inventory of a particular product and its purchases during the month of January were as follows: Quantity Unit Cost Total Cost Beginning inventory (Jan. 1)..................... 10 $27.50 $275 Purchase (Jan. 15)...................................... 15 $28.00 $420 Purchase (Jan. 23)...................................... _5 $29.00 $145 Total...................................................... 30 $840 On January 28, Ace Systems sells 18 units of this product. The other 12 units remain in inventory at January 31. Assuming that Ace Systems uses the FIFO cost flow assumption, the cost of goods sold to be recorded at January 28 is:

$363

$499

$504

$336

Answer 1

	Available for sale			Cost of goods sold			Ending Inventory
Date	Units	Unit cost	Total Cost	Units	Unit cost	Total Cost	Units	Unit Cost	Total Cost
Jan-01							10	27.5	275
Jan-15	15	28	420				10	27.5	275
							15	28	420
Jan-23	5	29	145				10	27.5	275
							15	28	420
							5	29	145
Jan-28				10	27.5	275	7	28	196
				8	28	224	5	29	145
Total						499			341

The cost of goods sold to be recorded at January 28 is $499.

Second option is correct.

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