Question

Perpetual Inventory Using FIFO

The following units of a particular item were available for sale during the calendar year:

Jan. 1	Inventory	4,100 units at $40
Apr. 19	Sale	2,500 units
June 30	Purchase	4,400 units at $43
Sept. 2	Sale	5,100 units
Nov. 15	Purchase	1,900 units at $47

The firm maintains a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale, assuming the first-in, first-out method. Present the data in the form illustrated in Exhibit 3. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Goods Sold Unit Cost column and in the Inventory Unit Cost column.

Answer 1

Date	Purchases			Cost of goods sold			Inventory on Hand
	Quantity	Unit cost	Total Cost	Quantity	Unit cost	Total Cost	Quantity	Unit Cost	Total Cost
Jan-01							4,100	40	164,000
Apr-19				2,500	40	100,000	1,600	40	64,000
Jun-30	4,400	43	189,200				1,600	40	64,000
							4,400	43	189,200
Sep-02				1,600	40	64,000
				3,500	43	150,500	900	43	38,700
Nov-15	1,900	47	89,300				900	43	38,700
							1,900	47	89,300
Total						314,500			128,000

Cost of goods sold $314,500

Cost of ending inventory $128,000