Question

Beginning inventory, purchases, and sales data for tennis rackets are as follows:

April 3 Inventory 20 units @ $15.00

11 Purchase 18 units @ $14.00

14 Sale 11 units

21 Purchase 10 units @ $22.00

25 Sale 12 units

Assuming the business maintains a perpetual inventory system, calculate the cost of goods sold and ending inventory using FIFO.

Select the correct answer.

a)cost of goods sold $772.00 ending inventory $430.00

b)cost of goods sold $430.00 ending inventory $342.00

c)cost of goods sold $342.00 ending inventory $772.00

d)cost of goods sold $342.00 ending inventory $430.00

Answer 1

• Correct Answer = Option ‘D’ Cost of Goods Sold = $ 342, Ending Inventory = $ 430
• 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	20	$                15.00	$                            300.00	20	$               15.00	$                     300.00	0	$                 15.00	$                         -
Purchases:
11-Apr	18	$                14.00	$                            252.00	3	$               14.00	$                       42.00	15	$                 14.00	$                210.00
21-Apr	10	$                22.00	$                            220.00	0	$              22.00	$                              -	10	$                 22.00	$                220.00
TOTAL	48		$                            772.00	23		$                     342.00 = Answer	25		$                430.00 = Answer