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4 years ago

Perpetual Inventory Using FIFO

Business

1 answer:

maks197457 [2]4 years ago

7 0

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

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