FIFO Accounting

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PDA

trneal

Jul 14, 2009, 02:02 PM

A firm has the following inventory information for the first quarter:

01/01 Beginning Inventory 50 units @<hidden> $5
01/15 Purchases 80 units @<hidden> $5.50
02/15 Purchases 60 units @<hidden> $5.25
02/15 Purchases 40 units @<hidden> $5.75
Sales 170 units @<hidden> $10
Total operating expenses $500

What is ending inventory under FIFO?

(Points: 5)
$305
$322.17
$335
$350

12. What is the cost of goods sold under FIFO? (Points: 5)
$770
$800
$900
$930

Please help me with this. I do not understand it.

Purdue2010

Jul 20, 2009, 12:46 AM

I can tell you how to do the first part, but I think you should at least try to figure out the second part on your own.
With the fifo method you are going to get rid of your oldest inventory first. So just start subtracting from the oldest inventory until you have gotten rid of 170 units. You are then left with 20 units @<hidden> $5.25 and 40 units @<hidden> $5.75. If you do the math you will get your answer. I would give it to you, but from the looks of this forum they don't want people just handing out answers.