Question

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

June?1 Balance 300 units @ $10 June 10 Sold 200 units @ $24 11 Purchased 800 units @ $12 15 Sold 500 units @ $25 20 Purchased 500 units @ $13 27 Sold 300 units @ $27 Calculate Gross Profit if FIFO Periodic method is used.

Answer 1

Closing inventory value as per - FIFO

No	Qty Purchased	Unit Cost	Total Cost	Qty Sold	Unit cost	Total cost	Inv.Qty	Unit Cost	Total cost
June 1							300	10	3000
June 10				200	10	2000	100	10	1000
June 11	800	12	9600				100	10	1000
							800	12	9600
June 15				100	10	1000
				400	12	4800	400	12	4800
June 20	500	13	6500				400	12	4800
							500	13	6500
June 27				300	12	3600	100	12	1200
							500	13	6500
TOTAL

Opening balance = 300 units @10 = 3000

Purchase = 800 units @12 + 500 units @ 13 = 16100

Sales = 200 units @ 24 + 500 units @ 25 + 300 units @ 27 = 25400

Closing stock = 100 units @ 12 + 500 units @ 13 = 7700

Gross profit = Sales – Purchase – opening stock + closing stock

Gross profit = 25400 – 16100 – 3000 + 7700 = 14000