Question

Splish Company uses a periodic inventory system. For April, when the company sold 650 units, the following information is available. Units Unit Cost Total Cost April 1 inventory 310 $34 $ 10,540 April 15 purchase 420 41 17,220 April 23 purchase 270 44 11,880 1,000 $39,640 Compute the April 30 inventory and the April cost of goods sold using the FIFO method.

Answer 1

Answer and Explanation:

The computation of the ending inventory and cost of goods sold using FIFO method as follows:

Given that

Total goods available for sale = 1000

Units sold = 650

Based on the above information

The Ending inventory  is

= 1000 - 650

= 350

Now 350 units comprise of 270 units of April 23 and the remaining 80 units would be of April 15

SO,

Ending inventory value is

= 270 × 44 + 80 × 41

= $15,160

ANd,

Cost of goods sold = Cost of goods available for sale - Ending inventory

= $39,640 - $15,160

= $24,480