Question

Chase Co. uses the perpetual inventory method. The inventory records for Chase reflected the following Jan 1 Beginning inventory 2200​ units @ $ 6.10​ Jan 12 Purchase 2300​ units @ $ 5.90​ Jan 18 Sales 2400​ units @ $ 7.60​ Jan 21 Purchase 2200​ units @ $ 6.20​ Jan 25 Purchase 2000​ units @ $ 6.00​ Jan 31 Sales 2350​ units @ $ 7.60​ Assuming Chase uses a FIFO cost flow method, the cost of goods sold for the sales transaction on January 31 is: Select one: A. $24,090. B. $14,305. C. $14,725. D. $13,940.

Answer 1

a)				Schedule
				Perpetual FIFO
	Purchases	Cost of Goods Sold	Inventory
Date	# of units	Unit Cost	Total Cost	# of units	Unit Cost ($)	Cost of Goods Sold	# of units	Unit Cost ($)	Total Cost ($)
Jan-01							2200	6.1	13420
Jan-12	2300	5.9	13570				2200	6.1	13420
							2300	5.9	13570
Jan-18				2200	6.1	13420	2100	5.9	12390
				200	5.9	1180
Jan-21	2200	6.2	13640				2100	5.9	12390
							2200	6.2	13640
Jan-25	2000	6	12000				2100	5.9	12390
							2200	6.2	13640
							2000	6	12000
Jan-31				2100	5.9	12390	1950	6.2	12090
				250	6.2	1550	2000	6	12000
Total						28540			24090
Cost of Goods Sold at January 31 = ( 12,390 + $ 1,550 ) = $ 13,940
Cost of Goods Sold at January 31 = $ 13,940
Correct Answer is ( D ) $ 13,940