Perpetual Inventory Using FIFO

Beginning inventory, purchases, and sales for Item Zeta9 are as follows:

Oct. 1 Inventory 200 units at $30

7 Sale 160 units

15 Purchase 180 units at $33

24 Sale 150 units

Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine (a) the cost of goods sold on October 24 and (b) the inventory on October 31.

Question

Emmalee Francis

Business

13 June, 20:13

Perpetual Inventory Using FIFO

Beginning inventory, purchases, and sales for Item Zeta9 are as follows:

Oct. 1 Inventory 200 units at $30

7 Sale 160 units

15 Purchase 180 units at $33

24 Sale 150 units

Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine (a) the cost of goods sold on October 24 and (b) the inventory on October 31.

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Answers (1)

Know the Answer?

Trevin Cooley · Answer 1

The cost of goods sold on October 24 is $4830

The perpetual inventory as on October 31 is 70 units of value as $2310

Explanation:

The order of events in the given scenario,

Oct. 1 - Inventory 200 units at $30 Oct. 7 - Sold 160 units Oct. 7 - Remaining Inventory 40 units at $30 Oct. 15 - Purchase 180 units at $33 Oct. 15 - Total Inventory 40 units at $30 + 180 units at $33 Oct. 15 - Total Inventory 220 units and value is $7140 ($30 * 40 + $33 * 180) Oct. 24 - Sold 150 units Oct. 24 - Taken 40 units from the purchase of $30 and 110 units from the purchase of $33 by using FIFO logic Oct. 24 - Total cost of goods sold is $4830

So, cost of goods sold on October 24 is $4830

Oct. 24 - Total Inventory 70 units and value is ($7140 - $4830) = $2310

The perpetual inventory value as on October 31 is $2310