Question

Ferris Company began January with 7,000 units of its principal product. The cost of each unit is $6. Merchandise transactions for the month of January are as follows: Purchases Date of Purchase Units Unit Cost* Total Cost Jan. 10 6,000 $ 7 $ 42,000 Jan. 18 7,000 8 56,000 Totals 13,000 98,000 * Includes purchase price and cost of freight. Sales Date of Sale Units Jan. 5 3,000 Jan. 12 1,000 Jan. 20 4,000 Total 8,000 12,000 units were on hand at the end of the month. 3. Calculate January's ending inventory and cost of goods sold for the month using FIFO, perpetual system.

Answer 1

Answer:

Inventory= $91,000

Sales= $49,000

Explanation:

Giving the following information:

Ferris Company began January with 7,000 units of its principal product. The cost of each unit is $6.

Merchandise transactions for January are as follows:

Jan. 10: 6,000 units at $7

Jan. 18: 7,000 units at $8

Totals: 13,000units at  $98,000

Sales:

Jan. 5: 3,000 units

Jan. 12: 1,000 unit

Jan. 20: 4,000 units

Total: 8,000

12,000 units were on hand at the end of the month.

FIFO (first-in, first-out):

Inventory= 7,000* 8 + 5,000*7= $91,000

Sales= 3000*6 +  1000*6 + 3000*6 + 1000*7= $49,000