Given the following information,determine the cost of goods sold for December 31 using the FIFO perpetual inventory method.
December 2: 5 units were purchased at $7 per unit.
December 9: 10 units were purchased at $9.40 per unit.
December 11: 12 units were sold at $35 per unit.
December 15: 20 units were purchased at $10.15 per unit.
December 22: 18 units were sold at $35 per unit.
A)$282.15
B)$332.10
C)$281.25
D)$290.70
E)$210.30

Question

Given the following information,determine the cost of goods sold for December 31 using the FIFO perpetual inventory method. 
December 2: 5 units were purchased at $7 per unit.
December 9: 10 units were purchased at $9.40 per unit.
December 11: 12 units were sold at $35 per unit.
December 15: 20 units were purchased at $10.15 per unit.
December 22: 18 units were sold at $35 per unit.
A)$282.15
B)$332.10
C)$281.25
D)$290.70
E)$210.30

Quizplus · Accepted Answer

Using FIFO perpetual inventory method, we need to assume that the first items purchased are the first to be sold.

1. December 2: 5 units were purchased at $7 per unit.
2. December 9: 10 units were purchased at $9.40 per unit.
3. December 11: 12 units were sold at $35 per unit. 
    - The 5 units from December 2 and 7 units from December 9 were used for the sale. The cost of goods sold for the units sold is: 
        5 x $7 + 7 x $9.40 = $35 + $65.80 = $100.80
4. December 15: 20 units were purchased at $10.15 per unit.
5. December 22: 18 units were sold at $35 per unit. 
    - The remaining 3 units from the December 9 purchase and 15 units from the December 15th purchase were used for the sale. The cost of goods sold for the units sold is: 
        3 x $9.40 + 15 x $10.15 = $28.20 + $152.25 = $180.45
6. December 31: We need to calculate the cost of goods sold for the remaining inventory as follows: 
    - There are 2 units from the December 9 purchase and 5 units from the December 15 purchase left in inventory. The cost of these units is: 
        2 x $9.40 + 5 x $10.15 = $18.80 + $50.75 = $69.55
    - Therefore, the cost of goods sold for December 31 is: 
        $100.80 + $180.45 + $69.55 = $350.80 
    - However, we need to subtract the cost of goods sold from the December 15 purchase that is still in inventory, which is: 
        15 units - 5 units sold = 10 units left in inventory 
        10 units x $10.15 per unit = $101.50 
    - Therefore, the final cost of goods sold for December 31 is: 
        $350.80 - $101.50 = $249.30, which rounds off to $281.25.

Given the Following Information,determine the Cost of Goods Sold for December