A company just starting business made the following four inventory purchases in June: $$\begin{array} { r r r r }
\text { June } & 1 & 150 \text { units } & ¥ 5,200 \
\text { June } & 10 & 200 \text { units } & 7,800 \
\text { June } & 15 & 200 \text { units } & 8,400 \
\text { June } & 28 & 150 \text { units } &\underline{ 6,600} \
& & & \underline { ¥ 28,000 }
\end{array}$$ A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand.Using the FIFO inventory method, the amount allocated to cost of goods sold for June is

Question

A company just starting business made the following four inventory purchases in June: $$\begin{array} { r r r r } 
\text { June } & 1 & 150 \text { units } & ¥ 5,200 \
\text { June } & 10 & 200 \text { units } & 7,800 \
\text { June } & 15 & 200 \text { units } & 8,400 \
\text { June } & 28 & 150 \text { units } &\underline{ 6,600} \
& & & \underline { ¥ 28,000 }
\end{array}$$ A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand.Using the FIFO inventory method, the amount allocated to cost of goods sold for June is

Quizplus · Accepted Answer

Under FIFO, the oldest inventory costs are used up first. The cost of goods sold includes the first 500 units purchased: 150 units at ¥5,200, 200 units at ¥7,800, and 150 units from the June 15 purchase at ¥6,300 (150/200 of ¥8,400), totaling ¥19,300.

A Company Just Starting Business Made the Following Four Inventory