303 points uses the FiFO method to assign costs to inventory and cost of goods s

Question

303 points uses the FiFO method to assign costs to inventory and cost of goods sold. The company uses a periodic inventory system Consider the following informatio Date #ofurms 100 75 125 Cost per unt January 1 $4 amounts would be reported as the cost of goods sold and ending inventory balances for the year? O Cost of goods sold S625, Ending inventory $175 O Cost of goods sold $755. Ending inventory $225 O Cost of goods sold $600, Ending inventory $200 O Cost of goods sold $550, Ending inventory $250 F12

Explanation / Answer

Calculation of cost of goods sold and ending inventory: Units available for sale= 100+75= 175 Units sold=125 Ending inventory= 175-125=50 Cost of goods sold Units Unit cost Total Sale from beginning inventory january 1 100 5 500 Sale from purchase June 2 25 4 100 125 600 Ending inventory Units Unit cost Total Inventory from purchase June 2 50 4 200 Therefore correct answer is Cost of goods sold $600, Ending inventory $200

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