A company purchased 100 units for $20 each on 31 January. It purchased 100 units for $30 on 28 February. It sold 150 units for $45 each from 1 March through to 31 December. If the company uses the First- In, First- Out inventory costing method, what is the amount of Cost of sales on the 31 December income statement?

Question

Quizplus · Accepted Answer

Under FIFO, the first 100 units sold are from the January purchase at $20 each, totaling $2,000. The next 50 units are from the February purchase at $30 each, totaling $1,500. Therefore, the total cost of sales is $3,500.

A Company Purchased 100 Units for $20 Each on 31