inventory costing: fifo\nfilimonov inc. has the following information related to purchases and sales of one…

inventory costing: fifo\nfilimonov inc. has the following information related to purchases and sales of one of its inventory items:\n\ndate description units purchased at cost units sold at retail\njune 1 beginning inventory 150 units @ $7 = $1,050\n9 purchase 1 200 units @ $12 = $2,400\n14 sale 1 300 units @ $25\n22 purchase 2 250 units @ $14 = $3,500\n29 sale 2 225 units @ $25\nassume that filimonov uses a perpetual inventory system.\nrequired:\ncalculate the cost of goods sold and the cost of ending inventory using the fifo inventory costing method.\ncost of goods sold $\ncost of ending inventory $\n

inventory costing: fifo\nfilimonov inc. has the following information related to purchases and sales of one of its inventory items:\n\ndate description units purchased at cost units sold at retail\njune 1 beginning inventory 150 units @ $7 = $1,050\n9 purchase 1 200 units @ $12 = $2,400\n14 sale 1 300 units @ $25\n22 purchase 2 250 units @ $14 = $3,500\n29 sale 2 225 units @ $25\nassume that filimonov uses a perpetual inventory system.\nrequired:\ncalculate the cost of goods sold and the cost of ending inventory using the fifo inventory costing method.\ncost of goods sold $\ncost of ending inventory $\n

Answer

Explanation:

Step1: Calculate cost of goods sold for Sale 1

Under FIFO, we sell the oldest units first. For Sale 1 (300 units):

  • 150 units from beginning inventory (cost per unit = $7)
  • (300 - 150=150) units from Purchase 1 (cost per unit = $12) Cost of goods sold for Sale 1: (150\times7+150\times12 = 1050+1800=2850)

Step2: Calculate cost of goods sold for Sale 2

After Sale 1, remaining units from Purchase 1: (200 - 150 = 50) units (cost per unit = $12) For Sale 2 (225 units):

  • 50 units from Purchase 1 (cost per unit = $12)
  • (225 - 50=175) units from Purchase 2 (cost per unit = $14) Cost of goods sold for Sale 2: (50\times12+175\times14=600 + 2450=3050)

Step3: Calculate total cost of goods sold

Total cost of goods sold=(2850 + 3050=5900)

Step4: Calculate ending inventory

Total units available for sale: (150+200 + 250=600) units Total units sold: (300+225 = 525) units Ending inventory units: (600-525 = 75) units These 75 units are from Purchase 2 (cost per unit = $14) Cost of ending inventory: (75\times14 = 1050)

Answer:

Cost of goods sold: ($5900) Cost of ending inventory: ($1050)