In: Accounting
Ferris Company began January with 7,000 units of its principal
product. The cost of each unit is $6. Merchandise transactions for
the month of January are as follows:
Purchases | |||||||||
Date of Purchase | Units | Unit Cost* | Total Cost | ||||||
Jan. 10 | 6,000 | $ | 7 | $ | 42,000 | ||||
Jan. 18 | 7,000 | 8 | 56,000 | ||||||
Totals | 13,000 | 98,000 | |||||||
* Includes purchase price and cost of freight.
Sales | ||
Date of Sale | Units | |
Jan. 5 | 3,000 | |
Jan. 12 | 3,000 | |
Jan. 20 | 4,000 | |
Total | 10,000 | |
10,000 units were on hand at the end of the month.
3. Calculate January's ending inventory and cost of goods sold for the month using FIFO, perpetual system.
Solution
Cost of Ending inventory | Cost of goods sold | |
FIFO | $ 77,000 | $ 63,000 |
Working
FIFO | ||||
Total Units Avalable for sale | 20000 | |||
Units Sold | 10000 | |||
Closing Stock in Units | 10000 | |||
Valuation | ||||
Ending Inventory | 7000 | @ | $ 8.00 | $ 56,000 |
3000 | @ | $ 7.00 | $ 21,000 | |
Value Of Ending Inventory | $ 77,000 | |||
Cost of Goods sold | $ 63,000 |