The following information was taken from the inventory records of Helena Ltd.: $$\begin{array} { | l | l | }
\hline \text { Dates } & \text { Inventory units } \
\hline \text { Inventory - Feb 1 } & 100 \text { units at } \$ 3.00 \
\hline \text { Purchases - April 1 } & 300 \text { units at } \$ 3.10 \
\hline \text { Purchases - July 15 } & 200 \text { units at } \$ 3.20 \
\hline \text { Units available for sale } & 600 \text { units } \
\hline & \
\hline \text { Sales - May 10 } & 200 \text { units at } \$ 6.00 \
\hline \text { Sales - November 15 } & 100 \text { units at } \$ 6.10 \
\hline
\end{array}$$ What would be the cost of goods sold, assuming that the FIFO method is used in a periodic inventory system?
A)$920
B)$930
C)$940
D)$950

Question

The following information was taken from the inventory records of Helena Ltd.: $$\begin{array} { | l | l | } 
\hline \text { Dates } & \text { Inventory units } \
\hline \text { Inventory - Feb 1 } & 100 \text { units at } \$ 3.00 \
\hline \text { Purchases - April 1 } & 300 \text { units at } \$ 3.10 \
\hline \text { Purchases - July 15 } & 200 \text { units at } \$ 3.20 \
\hline \text { Units available for sale } & 600 \text { units } \
\hline & \
\hline \text { Sales - May 10 } & 200 \text { units at } \$ 6.00 \
\hline \text { Sales - November 15 } & 100 \text { units at } \$ 6.10 \
\hline
\end{array}$$ What would be the cost of goods sold, assuming that the FIFO method is used in a periodic inventory system?
A)$920
B)$930
C)$940
D)$950

Quizplus · Accepted Answer

Under FIFO (First-In, First-Out), the oldest inventory costs are used up first. For the sales on May 10 (200 units), the cost is 100 units at $3.00 and 100 units at $3.10, totaling $620. For the sales on November 15 (100 units), the cost is 100 units at $3.10, totaling $310. Therefore, the total cost of goods sold is $620 + $310 = $930.

The Following Information Was Taken from the Inventory Records of Helena