Pearl Company has a perpetual inventory system.The company uses the FIFO method to assign costs to inventory and cost of goods sold.Consider the following information: $\begin{array}{llrc}
\text { Date } & \text { Description } & \text { Units } & \text { Cost per unit } \
\text { April 1 } & \text { Beginning inventory } & 1,000 & \$ 5 \
\text { April 2 } & \text { Purchase } & 750 & \$ 4 \
\text { April } 5 & \text { Sales } & 1,250 &
\end{array}$ What amounts would be reported as cost of goods sold and ending inventory for April?

Question

Quizplus · Accepted Answer

Under FIFO, the oldest costs are assigned to cost of goods sold first. The cost of goods sold for 1,250 units would be 1,000 units at $5 and 250 units at $4, totaling $6,000. The ending inventory would be 500 units at $4, totaling $2,000.

Pearl Company Has a Perpetual Inventory System What Amounts Would Be Reported as Cost of Goods Sold