Question

A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 420 units. Ending inventory at January 31 totals 170 units. Units Unit Cost Beginning inventory on January 1 380 $ 3.70 Purchase on January 9 90 3.90 Purchase on January 25 120 4.00 Required: Assume the perpetual inventory system is used and then determine the costs assigned to ending inventory when costs are assigned based on the FIFO method.

Answer 1

STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL FIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan							380	3.7	1406
9-Jan	90	3.9	351				380	3.7	1406
							90	3.9	351
25-Jan	120	4	480				380	3.7	1406
							90	3.9	351
							120	4	480
26-Jan				380	3.7	1406	10	3.9	39
				80	3.9	312	120	4	480
TOTAL	210		831	460		1718	130		519