Question

The following lots of Commodity P were available for sale during the year. Use this information to answer the question. Beginning inventory 5 units at $61 First purchase 15 units at $63 Second purchase 10 units at $74 Third purchase 10 units at $77 The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year. What is the amount of cost of goods sold for the year according to the FIFO method?

Answer 1

Answer:The answer is $1,256

Explanation:

Date. Qty. Price. Value. Qty. Price. Value. Qty. Value

$ $ $ $ $

15. 63. 945. - - - 15. 945

10. 74. 740. - - - 25. 1,685

10. 77. 770. - - - 35. 2,455

Beginning inventory = 5×61 = $305

Ending inventory = 20 × 77 =$1,504

Purchase = $2,465

To calculate the cost of good sold

Beginning inventory + Purchase - Ending inventory = Cost of good sold

= 305 + 2,455 - 1,504 = 1,256

The cost of good sold =$1,256