Pasquale has the following inventory information. $\begin{array}{rllr}
\text { July } 1 & \text { Beginning Inventory } & 20 \text { units at } \$ 19 & \$ 380 \
7 & \text { Purchases } & 70 \text { units at } \$ 20 & 1,400 \
22 & \text { Purchases } & 10 \text { units at } \$ 24 & 240\
& & &\$2,020
\end{array}$ A physical count of merchandise inventory on July 31 reveals that there are 30 units on hand. Using the FIFO inventory method the amount allocated to cost of goods sold for July is

Question

Pasquale has the following inventory information. $\begin{array}{rllr}
\text { July } 1 & \text { Beginning Inventory } & 20 \text { units at } \$ 19 & \$ 380 \
7 & \text { Purchases } & 70 \text { units at } \$ 20 & 1,400 \
22 & \text { Purchases } & 10 \text { units at } \$ 24 &  240\
& & &\$2,020
\end{array}$ A physical count of merchandise inventory on July 31 reveals that there are 30 units on hand. Using the FIFO inventory method the amount allocated to cost of goods sold for July is

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 July is calculated as follows:Beginning inventory (20 units at $19) = $380Purchases on July 7 (70 units at $20) = $1,400Total cost of goods available for sale = $1,780Since there are 30 units on hand at the end of July, the cost of goods sold is calculated as follows:Beginning inventory (20 units at $19) = $380Purchases on July 7 (10 units at $20) = $200Total cost of goods sold = $580

Pasquale Has the Following Inventory Information A Physical Count of Merchandise Inventory on July 31 Reveals