Question

[The following information applies to the questions displayed below.] In its first month of operations, Literacy for the Illiterate opened a new bookstore and bought merchandise in the following order: (1) 340 units at $9 on January 1, (2) 630 units at $10 on January 8, and (3) 930 units at $12 on January 29. Assume 1,170 units are on hand at the end of the month, calculate the cost of goods available for sale, ending inventory, and cost of goods sold under FIFO. Assume a periodic inventory system is used. (Round "Cost per Unit" to 2 decimal places.)

Answer 1

Solution:

FIFO (Periodic)
Particulars	Units	Cost per unit	Total
Purchases:
1-Jan	340	$9.00	$3,060.00
8-Jan	630	$10.00	$6,300.00
29-Jan	930	$12.00	$11,160.00
Goods available for Sale	1900		$20,520.00
Cost of goods sold:
Units from Jan 1 purchase	340	$9.00	$3,060.00
Units from Jan 8 purchase	390	$10.00	$3,900.00
Units from Jan 29 purchase	0	$12.00	$0.00
Total cost of goods sold	730		$6,960.00
Ending Inventory	1170		$13,560.00