Question

Ferris Company began January with 6,000 units of its principal product. The cost of each unit is $9. Merchandise transactions for the month of January are as follows:

	Purchases
Date of Purchase	Units		Unit Cost*			Total Cost
Jan. 10	5,000		$	10			$	50,000
Jan. 18	6,000			11				66,000
Totals	11,000							116,000

* Includes purchase price and cost of freight.

Sales
Date of Sale	Units
Jan. 5	3,000
Jan. 12	2,000
Jan. 20	4,000
Total	9,000

8,000 units were on hand at the end of the month.

Required:
1. Calculate January's ending inventory and cost of goods sold for the month using FIFO, periodic system.

Answer 1

Solution

	FIFO
Ending Inventory	$               22,000
Cost of Goods Sold	$               94,000

Working

FIFO
Total Units Available for sale		11000
Units Sold		9000
Closing Stock in Units		2000
Valuation
Ending Inventory	2000	@	$             11.00	$ 22,000
Value Of Ending Inventory				$ 22,000
Cost of Goods sold	116000 minus 22000			$ 94,000