Question

During the year, TRC Corporation has the following inventory transactions.

Date		Transaction	Number of Units			Unit Cost			Total Cost
Jan.	1	Beginning inventory		49		$	41			$	2,009
Apr.	7	Purchase		129			43				5,547
Jul.	16	Purchase		199			46				9,154
Oct.	6	Purchase		109			47				5,123
				486						$	21,833

For the entire year, the company sells 428 units of inventory for $59 each.

Required:

1. Using FIFO, calculate ending inventory, cost of goods sold, sales revenue, and gross profit.

Answer 1

FIFO Method:

Date	Number of Units Purchased	Cost per Unit	Purchase Cost	Number of Units Sold	Cost per Unit	Cost of Goods Sold	Number of Units Balance	Cost per Unit	Inventory Balance
Jan 1							49	$    41.00	$       2,009.00
Apr 7	129	$            43.00	$     5,547.00				49	$    41.00	$       2,009.00
							129	$    43.00	$       5,547.00
Jul 16	199	$            46.00	$     9,154.00				49	$    41.00	$       2,009.00
							129	$    43.00	$       5,547.00
							199	$    46.00	$       9,154.00
Oct 6	109	$            47.00	$     5,123.00				49	$    41.00	$       2,009.00
							129	$    43.00	$       5,547.00
							199	$    46.00	$       9,154.00
							109	$    47.00	$       5,123.00
				49	$    41.00	$ 2,009.00
				129	$    43.00	$ 5,547.00
				199	$    46.00	$ 9,154.00
				51	$    47.00	$ 2,397.00	58	$    47.00	$       2,726.00
Total	437		$   19,824.00	428		$ 19,107.0	58		$       2,726.00

As per above working,

Ending Inventory is $ 2,276

Cost of goods sold is $ 19,107

Sales Revenue = Sold units * Selling price per unit

= 428 * $ 59

= $ 25,252

Thus, Sales Revenue is $ 25,252

Gross Profit = Total Sales - Cost of goods sold

= $ 25,252 - $ 19,107

= $ 6,145

Thus, Gross Profit is $ 6,145