Question

In: Accounting

What is the Cost of Goods Sold for the Mar 31 st sale under FIFO inventory costing?

 
Sport Box sells a wide variety of sporting equipment. The following is information on the purchases and sales of their top selling hockey stick. The hockey stick sells for $130 and had transactions as follows:
 
Mar 1st beginning inventory 5 units at $30 per unit
Mar 3rd sold 3 units
Mar 6th purchased inventory 30 units at $40 per unit
Mar 17th sold 20 units
Mar 23rd purchased inventory 25 units at $50 per unit
Mar 31st sold 30 units
Required: Use the information above to answer the questions below for First In First Out (FIFO) and Moving Weighted Average (MWA) inventory costing methods.
 
ROUND ALL ANSWERS TO 2 DECIMAL PLACES
 
 
 
 
What is the Cost of Goods Sold for the Mar 31 st sale under FIFO inventory costing?
 

Solutions

Expert Solution

Under the FIFO method, the earliest goods purchased are the first ones removed from the inventory account. The goods that are purchased earlier are removed first under FIFO.

In the given situation, total sales in units = 3 units + 20 units + 30 units = 53 units.

Under FIFO firstly the 5 units from opening inventory will be sold, then 30 units purchased on March 6 will be sold and the balance units i.e. 18 units (53 units - 30 units -5 units) will be sold from the purchase on March 23.

Hence, the cost of goods sold = Cost of goods of 5 units from opening inventory + Cost of goods of 30 units from purchase on March 6 + Cost of goods of 18 units from purchase on March 23

Cost of goods of 5 units from opening inventory = 5 units * $30 = $150

Cost of goods of 30 units from purchase on March 6 = 30 units * $40 = $1200

Cost of goods of 18 units from purchase on March 23 = 18 units * $50 = $900

Hence, the cost of goods sold under FIFO = $150 + $1200 + $900 = $2,250

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

What is the Cost of Goods Sold for the Mar 17th sale under MWA inventory costing?
    Sport Box sells a wide variety of sporting equipment. The following is information on the purchases and sales of their top selling hockey stick. The hockey stick sells for $130 and had transactions as follows:   Mar 1st beginning inventory 5 units at $30 per unit Mar 3rd sold 3 units Mar 6th purchased inventory 30 units at $40 per unit Mar 17th sold 20 units Mar 23rd purchased inventory 25 units at $50 per unit Mar 31st...
Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods.
Penn Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1:Required Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods.
M7-8 Calculating Cost of Goods Available for Sale, Cost of Goods Sold, and Ending Inventory under...
M7-8 Calculating Cost of Goods Available for Sale, Cost of Goods Sold, and Ending Inventory under Periodic FIFO, LIFO, and Weighted Average Cost [LO 7-3] In its first month of operations, Literacy for the Illiterate opened a new bookstore and bought merchandise in the following order: (1) 200 units at $7 on January 1, (2) 500 units at $8 on January 8, and (3) 800 units at $9 on January 29. Assume 975 units are on hand at the end...
Computing Cost of Goods Sold and Ending Inventory Under FIFO, LIFO, and Average Cost Assume that...
Computing Cost of Goods Sold and Ending Inventory Under FIFO, LIFO, and Average Cost Assume that Madden Company reports the following initial balance and subsequent purchase of inventory. Inventory balance at beginning of year 1,820 units @ $150 each $273,000 Inventory purchased during the year 2,380 units @ $180 each 428,400 Cost of goods available for sale during the year 4,200 units $701,400 Assume that 2,800 units are sold during the year. Compute the cost of goods sold for the...
how do you calculate ending inventory or cost of goods sold under LIFO and FIFO    ...
how do you calculate ending inventory or cost of goods sold under LIFO and FIFO     how do you use the Gross Profit Method to estimate a loss of inventory how do you use the relative sales value method of allocating cost to items purchased What are the common disclosures required for inventory?
E7-6 Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost LO7-2...
E7-6 Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost LO7-2 Hamilton Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Units Unit Cost Inventory, December 31, prior year 1,810 $ 8 For the current year: Purchase, March 21 6,020 7 Purchase, August 1 4,010 5 Inventory, December 31, current year 2,920 Find LIFO...
M7-7 to M7-9 Calculating Cost of Goods Available for Sale, Ending Inventory, Sales, Cost of Goods Sold, and Gross Profit under Periodic FIFO, LIFO, and Weighted Average Cost [LO 7-3]
Required informationM7-7 to M7-9 Calculating Cost of Goods Available for Sale, Ending Inventory, Sales, Cost of Goods Sold, and Gross Profit under Periodic FIFO, LIFO, and Weighted Average Cost [LO 7-3][The following information applies to the questions displayed below.]The following are the transactions for the month of July.UnitsUnit CostUnit Selling PriceJuly 1Beginning Inventory51$10July 13Purchase25512July 25Sold(100)$16July 31Ending Inventory206M7-7 Calculating Cost of Goods Available for Sale, Ending Inventory, Sales, Cost of Goods Sold, and Gross Profit under Periodic FIFO [LO 7-3]Calculate cost...
Calculate cost of ending inventory and cost of goods sold using periodic FIFO, LIFO, and Weighted...
Calculate cost of ending inventory and cost of goods sold using periodic FIFO, LIFO, and Weighted Average Cost methods. Description # of units Cost per unit Beginning inventory: 20 20 Jan.15 Purchase: 22 27 Jan. 20 Sale 10 blank Jan.25 Purchase 18 25 Jan.28 Sale   15 blank
1. To adjust a company’s LIFO cost of goods sold to FIFO cost of goods sold...
1. To adjust a company’s LIFO cost of goods sold to FIFO cost of goods sold the ending LIFO reserve is added to LIFO cost of goods sold. the ending LIFO reserve is subtracted from LIFO cost of goods sold. an increase in the LIFO reserve is subtracted from LIFO cost of goods sold. a decrease in the LIFO reserve is subtracted from LIFO cost of goods sold. 2. All of the following statements are true regarding the LIFO reserve...
Calculate the cost of goods sold and the cost of ending inventory using the FIFO, LIFO, and average cost methods.
Inventory Costing Methods: Periodic Inventory Systems. (Appendix 6B)Tyler Company has the following information related to purchases and sales of one of its inventory items.DateDescriptionUnits Purchased at CostUnits Sold at RetailSept. 1Beginning inventory20 units @ $510Purchase30 units @ $820Sales40 units @ $1525Purchase25 units at $10Assume that the company uses the periodic inventory system.Required:Calculate the cost of goods sold and the cost of ending inventory using the FIFO, LIFO, and average cost methods. (Note: Use four decimal places for per-unit calculations and...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT