Adam Inc.uses a perpetual inventory system. Jan.
$\begin{array}{rlr}
1 & \text { On hand, } 10 \text { units at } \$ 2 \text { each } & \$ 20 \
4 & \text { Sold } 8 \text { units for } \$ 10 \text { each } & 80 \
22 & \text { Purchased } 50 \text { units at } \$ 4 \text { each } & 200 \
26 & \text { Sold } 48 \text { units for } \$ 10 \text { each } & 480
\end{array}$ If Adam uses the FIFO method, how much is cost of goods sold for the month of January?
A) $208
B) $212
C) $560
D) $204

Question

Adam Inc.uses a perpetual inventory system. Jan. 
$\begin{array}{rlr}
1 & \text { On hand, } 10 \text { units at } \$ 2 \text { each } & \$ 20 \
4 & \text { Sold } 8 \text { units for } \$ 10 \text { each } & 80 \
22 & \text { Purchased } 50 \text { units at } \$ 4 \text { each } & 200 \
26 & \text { Sold } 48 \text { units for } \$ 10 \text { each } & 480
\end{array}$ If Adam uses the FIFO method, how much is cost of goods sold for the month of January?
A) $208
B) $212
C) $560
D) $204

Quizplus · Accepted Answer

Under the FIFO (First-In, First-Out) method, the oldest inventory items are sold first. The cost of goods sold (COGS) calculation for January would be as follows: - For the first sale of 8 units: 8 units * $2 = $16- For the second sale of 48 units: The remaining 2 units from the initial inventory at $2 each = $4, plus 46 units from the new purchase at $4 each = $184. Total COGS = $16 (from the first sale) + $4 + $184 (from the second sale) = $204.

Adam IncUses a Perpetual Inventory System If Adam Uses the FIFO Method, How Much Is Cost