Question

​Baldwin, Inc. had the following balances and transactions during​ 2019: Beginning Merchandise Inventory as of January​ 1, 2019 125 units at​ $81 March 10 Sold 50 units June 10 Purchased 225 units at​ $86 October 30 Sold 175 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 firstminus​in, firstminusout inventory costing method are​

Answer 1

Answer:

$18,725

Explanation:

Given:

Inventory as of January​ 1, 2019 =  125 units at​ $81

March 10 Sold = 50 units

June 10 Purchased = 225 units at​ $86

October 30 Sold = 175 units

cost of goods sold on March 10 = 50 × $81 = $4050

units left in inventory after the units sold on March 10 = 125 - 50

= 75 units

Now,

The number of units sold on October will include the units that are left in the inventory after the sales on March 10

thus,

the cost of goods sold on October 30 = 75 × $81 + (175 - 75 ) × $86

= $14675

hence,

the total cost of the goods sold = $4050 + $14675 = $18,725