Question

On December 1, Marzion Electronics Ltd. has three DVD players left in stock. All are identical, all are priced to sell at $161. One of the three DVD players left in stock, with serial #1012, was purchased on June 1 at a cost of $113. Another, with serial #1045, was purchased on November 1 for $95. The last player, serial #1056, was purchased on November 30 for $88. Calculate the cost of goods sold using the FIFO periodic inventory method assuming that two of the three players were sold by the end of December, Marzion Electronics' year-end.

Answer 1

Answer:

$208

Explanation:

In order to calculate the cost of goods sold using the FIFO periodic inventory method assuming that two of the three players were sold by the end of December, we will assume that the two DVDs sold were in accordance to the sequence in which they were bought.

FIFO as the name implies means first in first out.

Therefore the cost of sales will be the addition of the amounts for those two: The first, with serial #1012, was purchased on June 1 at a cost of $113.

Th second, with serial #1045, was purchased on November 1 for $95

Therefore  $113+ $95 = $208

Answer 2

Answer:

$208

Explanation:

Using the FIFO Inventory method, inventory items are assumed to be sold in the order in which they were purchased from the earliest to the latest.

The order of purchase of the inventory items are.

Jun. 1, DVD Player 1012, $113

Nov. 1, DVD Player 1045, $95

Nov. 31, DVD Player 1056, $88

Therefore, if two of the three items are sold, the cost of goods sold is the cost of the first two items purchased

= 113 + 95 = $208.