Question

# The following represents the inventory of Sunrise Company for the month of January: Jan. 1 On...

The following represents the inventory of Sunrise Company for the month of January: Jan. 1 On hand, 10 units at \$80 each Purchases Sales Jan. 8 25 units at \$92 each Jan. 4 8 units @ \$300 each 22 50 units at \$104 each 15 20 units @ \$300 each 28 15 units at \$116 each 26 52 units @ \$300 each Calculate Sunrise Company’s Cost of Goods Sold using Periodic FIFO for the month of January. Select one: A. \$7,864 B. \$8,320 C. \$7,780 D. \$7,720

 Cost of goods available for sale Units Units cost Total cost Jan 1 10 \$80 \$800 Jan 8 25 \$92 \$2,300 jan 22 50 \$104 \$5,200 jan 28 15 \$116 \$1,740 Total 100 \$10,040

Cost of goods available for sale = \$10,040

Number of units available for sale = 100

Number of units sold = 8 + 20 + 52

= 80

Ending inventory units = Number of units available for sale - Number of units sold

= 100 - 80

= 20

Calculation of cost of ending inventory

 date Unit Unit cost Total cost jan 22 5 \$104 \$520 Jan 28 15 \$116 \$1,740 Total 20 \$2,260

cost of ending inventory = \$2,260

Cost of goods sold = Cost of goods available for sale - cost of ending inventory

= 10,040 - 2,260

= \$7,780

Correct option is (C)

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