Table 6-6 Sam's Wholesale Bikes $$\begin{array} { | l | l | }
\hline \text { January } 1 \text { inventory balance } & 15 \text { units at } \$ 350 \text { per unit } \
\hline \text { January } 4 \text { purchase } & 50 \text { units at } \$ 375 \text { per unit } \
\hline \text { January } 15 \text { sale } & 40 \text { units at } \$ 550 \text { per unit } \
\hline \text { February } 8 \text { purchase } & 80 \text { units at } \$ 405 \text { per unit } \
\hline \text { February } 15 \text { sale } & 70 \text { units at } \$ 550 \text { per unit } \
\hline
\end{array}$$
-Refer to Table 6-6. What is the cost of goods sold for the two months assuming that Sam's uses the perpetual FIFO inventory method?

Question

Table 6-6 Sam's Wholesale Bikes $$\begin{array} { | l | l | } 
\hline \text { January } 1 \text { inventory balance } & 15 \text { units at } \$ 350 \text { per unit } \
\hline \text { January } 4 \text { purchase } & 50 \text { units at } \$ 375 \text { per unit } \
\hline \text { January } 15 \text { sale } & 40 \text { units at } \$ 550 \text { per unit } \
\hline \text { February } 8 \text { purchase } & 80 \text { units at } \$ 405 \text { per unit } \
\hline \text { February } 15 \text { sale } & 70 \text { units at } \$ 550 \text { per unit } \
\hline
\end{array}$$
-Refer to Table 6-6. What is the cost of goods sold for the two months assuming that Sam's uses the perpetual FIFO inventory method?

Quizplus · Accepted Answer

Under the perpetual FIFO method, the cost of goods sold is calculated by using the cost of the oldest inventory first. For the January 15 sale, 15 units at $350 and 25 units at $375 are sold. For the February 15 sale, 25 units at $375 and 45 units at $405 are sold. The total cost is (15*$350 + 25*$375) + (25*$375 + 45*$405) = $42,225.

Table 6-6 Sam's Wholesale Bikes -Refer to Table 6-6