Question

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

Answer 1

	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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