Altira Corporation uses a perpetual inventory system. The following transactions
ID: 2568701 • Letter: A
Question
Altira Corporation uses a perpetual inventory system. The following transactions affected its merchandise inventory during the month of August 2018: Aug.1 Inventory on hand—2,700 units; cost $6.80 each. 8 Purchased 13,500 units for $6.20 each. 14 Sold 10,800 units for $12.70 each. 18 Purchased 8,100 units for $5.60 each. 25 Sold 9,800 units for $11.70 each. 31 Inventory on hand—3,700 units. Required: 1. Determine the inventory balance Altira would report in its August 31, 2018, balance sheet and the cost of goods sold it would report in its August 2018 income statement using the FIFO method. (Round "Cost per Unit" to 2 decimal places.)
Explanation / Answer
Units Unit Price Total Price Aug-01 Opening Inventory 2700 $ 6.80 $ 18,360.00 Aug-08 Purchases 13500 $ 6.2 $ 83,700.00 Aug-18 Purchases 8100 $ 5.6 $ 45,360.00 Total - goods Avaialble For Sale 24300 $ 1,47,420.00 Aug-14 Sold 10800 $ 12.70 $ 1,37,160.00 Aug-25 Sold 9800 $ 11.70 $ 1,14,660.00 Aug-31 Closing Inventory in hand 3700 CALCULATION OF COST OF GOODS SOLD Units Unit Price Total Price Aug-14 Sold 10800 From the opening Inventory 2700 $ 6.80 $ 18,360.00 From the purchases as on Aug -08 8100 $ 6.2 $ 50,220.00 Aug-25 Sold 9800 From the purchases as on Aug -08 5400 $ 6.2 $ 33,480.00 From the purchases as on Aug -18 4400 $ 5.6 $ 24,640.00 Total Cost Of Goods Sold $ 1,26,700.00 CALCULATION OF THE CLOSING INVENTORY Goods Available For Sale = $ 1,47,420.00 Less: Cost of Goods Sold $ 1,26,700.00 Closing Inventory $ 20,720.00 Details are as below, From the purchases as on Aug -18 3700 $ 5.6 $ 20,720.00
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