Question

Bramble Outdoor Stores Inc. uses a perpetual inventory system and has a beginning inventory, as at April 1, of 148 tents. This consists of 51 tents at a cost of $ 206 each and 97 tents at a cost of $ 223 each. During April, the company had the following purchases and sales of tents:

			Purchases			Sales
Date			Units		Unit Cost		Units		Unit Price
Apr.	3						75		$ 414
	10		202		$ 271
	17						249		414
	24		287		290
	30						198		414

(a)

Determine the cost of goods sold and the cost of the ending inventory using FIFO.

What is the cost of goods sold?		$
What is the cost of the ending inventory?		$

Answer 1

• Total units available for sale = Beginning units + Purchased units = 148 + 202 + 287 = 637 units.
• Total units sold = 198 units
• Units in ending inventory = 637 – 198 = 439 units
• Working

FIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	51	$              206.00	$                     10,506.00	51	$       206.00	$        10,506.00	0	$      206.00	$                         -
	97	$              223.00	$                      21,631.00	97	$       223.00	$        21,631.00	0	$      223.00	$                         -
Purchase #1	202	$              271.00	$                      54,742.00	50	$       271.00	$        13,550.00	152	$      271.00	$          41,192.00
Purchase #2	287	$              290.00	$                      83,230.00		$       290.00	$                        -	287	$      290.00	$          83,230.00
TOTAL	637		$                    170,109.00	198		$        45,687.00	439		$        124,422.00

• Answer

Cost of Goods Sold = $ 45,687

Ending Inventory = $ 124,422