Question

G.C. Murphy's inventories are determined using FIFO. G.C. Murphy's provided the following information for the first quarter of 2016:

Beginning inventory, January 1, 2016	60 units @ $42.00
(1) Purchase	40 units @ $37.50
(2) Purchase	95 units @ $44.00
(3) Purchase	30 units @ $43.00
Ending inventory, March 31, 2016	45 units

a.	Compute the company's cost of goods sold for the first quarter.
b.	Computer the ending inventory to be reported on G.C. Murphy's balance sheet at March 31, 2016.

Answer 1

	Units	Cost per unit	value
Opening Stock	60	$ 42.00	$ 2,520.00
Purchases
1	40	$ 37.50	$ 1,500.00
2	95	$ 44.00	$ 4,180.00
3	30	$ 43.00	$   1,290.00
Total	225 units		$ 9,490.00

FIFO
Total Units Available for sale		225
Units Sold		180
Closing Stock in Units		45
Valuation
Closing stock	30	@	$    43.00	$    1,290.00
	15	@	$    44.00	$        660.00
Value Of Closing Stock				$    1,950.00
Cost of Goods sold	(9490-1950)			$    7,540.00

Requirement a

Company’s cost of goods sold for the first quarter= $7,450.

Requirement b

Ending inventory to be reported on G.C. Murphy's balance sheet at March 31, 2016= $1,950