Tedder Co.
Tedder uses a periodic inventory system. At the end of January, 20 units were on hand. The following additional information is available for the month of January:
$$\begin{array} { l l c l }
\text { Jan. } 1 & \text { Beginning inventory: } 10 \text { units at \$2 each } & \$ 20 \
20 & \text { Purchased } 90 \text { units for } \$ 3 \text { each } & 270 & \
& { \text { Cost of goods available for sale } } & \$ 290
\end{array}$$
-Refer to the information provided in the figure Tedder Co.If the company uses FIFO inventory costing,how much is cost of goods sold for January?

Question

Tedder Co.
Tedder uses a periodic inventory system. At the end of January, 20 units were on hand. The following additional information is available for the month of January:
 $$\begin{array} { l l c l } 
\text { Jan. }  1 & \text { Beginning inventory: } 10 \text { units at \$2 each } & \$ 20 \
20 & \text { Purchased } 90 \text { units for } \$ 3 \text { each } & 270 & \
&  { \text { Cost of goods available for sale } } & \$ 290
\end{array}$$
-Refer to the information provided in the figure Tedder Co.If the company uses FIFO inventory costing,how much is cost of goods sold for January?

Quizplus · Accepted Answer

FIFO (first-in, first-out) assumes that the first units purchased are the first units sold. Therefore, the cost of goods sold for January is the cost of the 20 units on hand at the beginning of the month (10 units at $2 each) plus the cost of the 70 units purchased on January 20 (70 units at $3 each). This equals $230.

Tedder Co Tedder Uses a Periodic Inventory System -Refer to the Information Provided in the Figure Tedder Co

Tedder Co
Tedder Uses a Periodic Inventory System -Refer to the Information Provided in the Figure Tedder Co