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QS 5-10 Perpetual: Assigning costs with FIFO LO P1 Trey Monson starts a merchand

ID: 2538642 • Letter: Q

Question

QS 5-10 Perpetual: Assigning costs with FIFO LO P1 Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. Also, on December 15, Monson sells 28 units for $50 each Purchases on December 7 Purchases on December 14 Purchases on December 21 18 units $20.00 cost 32 units @ $30.00 cost 28 units @ $36.00 cost Required Monson uses a perpetual inventory system. Determine the costs assigned to the December 31 ending inventory based on the FIFO method Perpetual FIFO: Goods Purchased Cost of Goods Sold Inventory Balance #of #of Units Cost Per Unit Goods Purchased Cost Per Cost of Goods hased Units Sold Cost Per Inventory Balance Date Unit Sold # of Units Unit December 7 December December 15 December 21 Totals

Explanation / Answer

Perpetual FIFO GOODS PURCHASED Cost of goods sold INVENTORY BALANCE Date Units   Cost per unit Goods purchased Units   Cost per unit Cost of goods sold Units   Cost per unit Inventory balance Dec-07                             18.00                  20.00      360.00                -                           -                  -                  -                    20.00                -   Dec-14                             32.00                  30.00      960.00                -                           -                  -           22.00                  30.00      660.00 Dec-15                                    -                           -                  -           18.00                  20.00      360.00         10.00                  30.00      300.00 Dec-21                             28.00                  36.00 1,008.00                -                           -                  -           28.00                  36.00 1,008.00 Total                             78.00 2,328.00         28.00      660.00         50.00 1,668.00

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