Question

The Wright Company recorded the following inventory information during the month of October:

	UNITS	UNIT COST	TOTAL COST	UNITS ON HAND
Balance on October 1	2,000	$1.00	$2,000	2,000
Purchased on October 8	1,200	$3.00	$3,600	3,200
Sold on October 20	1,500			1,700
Purchased on October 22	2,000	$4.00	$8,000	3,700
Sold on October 28	2,200			1,500
Purchase on October 29	1,000	$5.00	$5,000	2,500

Part B: Using the partially computed tables on the next three pages, compute the cost of goods sold and the cost of the 2,500 units in ending inventory under each of the assumptions given above.

COSTING INVENTORY IN A PERPETUAL INVENTORY SYSTEM

FIFO – Perpetual

Date	Purchases			Sales			Inventory on Hand
	Units	Cost	Total	Units	Cost	Total	Units	Cost	Total
10/1							2,000	$1.00	$2,000
10/8 Purchased 1,200 units	1,200	$3.00	$3,600				2,000 1,200 3,200	$1.00 $3.00	$2,000 3,600 $5,600
10/20 Sold 1,500 units				1,500	$1.00	$1,500	500 1,200 1,700	$1.00 $3.00	$   500 3,600 $4,100
10/22 Purchased 2,000 units
10/28 Sold 2,200 units
10/29 Purchased 1,000 units
TOTALS

Answer 1

	Purchase			Cost of goods sold			Ending inventory
Date	# of unit	Unit Cost	Total Cost	# of units	Unit Cost	Total Cost	# of unit	Unit Cost	Total cost
Oct 1							2000	1	2000
Oct 8	1200	3	3600				2000 1200	1 3	2000 3600
Oct 20				1500	1	1500	500 1200	1 3	500 3600
Oct 22	2000	4	8000				500 1200 2000	1 3 4	500 3600 8000
Oct 28				500 1200 500	1 3 4	500 3600 2000	1500	4	6000
Oct 29	1000	5	5000				1500 1000	4 5	6000 5000
Total						7600	2500		11000

Cost of goods sold = $7600; Cost of ending inventory = $11000