Question

The following data represent the beginning inventory and, in order of occurrence, the purchases and sales of Delacour, Inc. for an operating period. Units Unit Cost Total Cost Units Sold Beginning Inventory 30 $28 $ 840 Sale No. 1 20 Purchase No. 1 50 40 2,000 Sale No. 2 40 Purchase No. 2 20 44 880 __ Totals 100 $3,720 60 Assuming Delacour, Inc. uses FIFO perpetual inventory procedures, it records sale no. 2 as an entry to Cost of Goods Sold for:

Answer 1

Answer:

$2040

Explanation:

FIFO under the perpetual inventory system is one in which the sale or purchase of inventory is immediately updated in the inventory account such that the true position of inventory available per time is known.

FIFO is first in first out which means that inventory purchased first are sold first.

Given;

                                     Units   Unit Cost   Total Cost        Units Sold

Beginning Inventory     30        $28             $ 840

Sale No. 1                                                                                   20

Purchase No. 1             50         $40             $2,000

Sale No. 2                                                                                  40

Purchase No. 2            20         $44              $880

Totals                           100                             $3,720               60

Cost of goods sold = $28 * 20 + $28 * 10 + $40 * 30

= $560 + $280 + $1200

= $2040