Question

Inventory information for Part 311 of Bramble Corp. discloses the following information for the month of June.

June 1		Balance		303 units @ $14		June 10		Sold		201 units @ $34
11		Purchased		798 units @ $17		15		Sold		498 units @ $35
20		Purchased		497 units @ $18		27		Sold		299 units @ $38

Assuming that the perpetual inventory method is used and costs are computed at the time of each withdrawal, what is the gross profit if the inventory is valued at FIFO?

Answer 1

BRAMBLE CORP.
FIFO METHOD
Date	Cost of Goods Available for Sale			Cost of Goods Sold			Inventory Balance
	Number of Units	Cost per Unit	Cost of Goods Available for Sale	Number of Units Sold	Cost per Unit	Cost of Goods Available for Sale	Number of Units in ending inventory	Cost per Unit	Ending Inventory
Jun-01	303	$        14	$              4,242				303	$          14	$           4,242
Jun-10				201	$                14	$          2,814	102	$          14	$           1,428
Jun-11	798	$        17	$            13,566				102	$          14	$           1,428
							798	$          17	$         13,566
Jun-15				102	$                14	$          1,428
				396	$                17	$          6,732	402	$          17	$           6,834
Jun-20	497	$        18	$              8,946				402	$          17	$           6,834
							497	$          18	$           8,946
Jun-27				299	$                17	$          5,083	103	$          17	$           1,751
							497	$          18	$           8,946
	1295		$            26,754	998		$        16,057	600		$        10,697

Main Answer:

Gross Profit = Sales - Cost of Goods Sold

    = $ 35,626 - $ 16,057

   =$ 19,569

Cost of Goods Sold = Beginning Inventory Cost + Purchased Cost - Ending Inventory Cost

    = $ 4,242 + $ 22,512 - $ 10,697

    = $ 16,057

Alternatively,

Cost of Goods Sold = Cost of Goods Available for Sale - Ending Inventory Cost

    = $ 26,754 - $ 10,697

    = $ 16,057

Working Note:

Total Sales:

Date	Units	Per Unit	Sales
Jun-10	201	$         34	$         6,834
Jun-15	498	$         35	$       17,430
Jun-27	299	$         38	$       11,362
Total Sales	998		$       35,626