A company purchased 80 units for $20 each on January 31.It purchased 190 units for $25 each on February 28.It sold 190 units for $80 each from March 1 through December 31.If the company uses the first-in,first-out inventory costing method,what is the amount of Cost of Goods Sold on the income statement for the year ending December 31? (Assume that the company uses a perpetual inventory system. )

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Quizplus · Accepted Answer

C) 11ea8a42_4f31_0b26_8b44_07255f3c4990_TB5024_00 Number of units sold = 190 units.As FIFO is used,80 units will be valued at $20 per unit (Jan 31)and remaining 110 units will be valued at $25 per unit (Feb 28. )
Cost of Goods Sold = ((80 units × $20)+ (110 units × $25))= $1,600 + $2,750 = $4,350

A Company Purchased 80 Units for $20 Each on January