Question

Carlson Auto Dealers Inc. sells a handmade automobile as its only product. Each automobile is identical; however, they can be distinguished by their unique ID number. At the beginning of 2021, Carlson had three cars in inventory, as follows:

Car ID	Cost
203	$	69,000
207		69,000
210		72,000

During 2021, each of the three autos sold for $99,000. Additional purchases (listed in chronological order) and sales for the year were as follows:

Car ID	Cost			Selling Price
211	$	69,000		$	99,000
212		69,000			102,000
213		70,500		not sold
214		72,000			105,000
215		75,000			109,500
216		73,500		not sold
217		78,000			114,000
218		75,300			115,500
219		81,000		not sold

2. Calculate ending inventory and cost of goods sold assuming FIFO and a periodic inventory system.

Answer 1

Correct Answer:

	FIFO
Cost of Goods Sold	$   6,39,000
Cost of Ending Inventory	$   2,25,300

Working:

	Cost of Goods Available for sale
		Units	Cost per unit	value
203	Beginning Inventory	1	$            69,000	$             69,000
207	Beginning Inventory	1	$            69,000	$             69,000
210	Beginning Inventory	1	$            72,000	$             72,000
211	Purchases	1	$            69,000	$             69,000
212	Purchases	1	$            69,000	$             69,000
213	Purchases	1	$            70,500	$             70,500
214	Purchases	1	$            72,000	$             72,000
215	Purchases	1	$            75,000	$             75,000
216	Purchases	1	$            73,500	$             73,500
217	Purchases	1	$            78,000	$             69,000
218	Purchases	1	$            75,300	$             75,300
219	Purchases	1	$            81,000	$             81,000
				$                      -
	Total	12		$      8,64,300.0

	FIFO
A	Total Units Available for sale			12			$            8,64,300
	Units Sold			9
	Ending Inventory Units			3
	Valuation
	Cost of Goods Sold	203	1		$       69,000.00		$               69,000
		207	1		$       69,000.00		$               69,000
		210	1		$       72,000.00		$               72,000
		211	1		$       69,000.00		$               69,000
		212	1		$       69,000.00		$               69,000
		213	1		$       70,500.00		$               70,500
		214	1		$       72,000.00		$               72,000
		215	1		$       75,000.00		$               75,000
		216	1		$       73,500.00		$               73,500
B	Cost of Goods Sold		9	units			$            6,39,000
A-B	Ending Inventory		3	units			$            2,25,300

End of Answer.

Thanks