Question

Baldwin Company had the following balances and transactions during​ 2019: Beginning Merchandise Inventory as of January​ 1, 2019 125 units at​ $82 March 10 Sold 80 units June 10 Purchased 250 units at​ $86 October 30 Sold 205 units What would be reported as Cost of Goods Sold on the income statement for the year ending December​ 31, 2019 if the perpetual inventory system and the​ first-in, first-out inventory costing method are​ used?

Answer 1

Answer:

Cost of Goods Sold on the income statement for the year ending December​ 31, 2019 is $ 24,010

Explanation:

First in First Out is an Inventory management system that is build on the idea of selling first the Inventory that came earlier or acquired first.

Perpetual Inventory System Records cost of sale of inventory with each sale

Sale of Inventory was made on March 10,2019 and October 30,2019. It is important to keep track of the cost of sale of inventory on these dates and then find the total which will be presented as cost of sales in the financial Statement

Cost of Goods Sold

March 10,2019 : 80 units × $82                 6,560

October 30,2019 : 45 units × $ 82            3,690

                               160 units × $ 86         13,760

Total Cost of Goods Sold                         24,010