Samson Company had the following balances and transactions during 2013. $$\begin{array} { | l | l | }
\hline \text { Beginning inventory } & 10 \text { units at } \$ 70 \
\hline \text { March } 10 & \text { Sold } 8 \text { units } \
\hline \text { June } 10 & \text { Purchased } 20 \text { units at } \$ 80 \
\hline \text { October 30 } & \text { Sold } 15 \text { units } \
\hline
\end{array}$$
- What would the company's Cost of goods sold be on the December 31,2013 income statement if the perpetual First-In,First-Out costing method is used? (Answers are rounded to the nearest dollar.)

Question

Samson Company had the following balances and transactions during 2013. $$\begin{array} { | l | l | } 
\hline \text { Beginning inventory } & 10 \text { units at } \$ 70 \
\hline \text { March } 10 & \text { Sold } 8 \text { units } \
\hline \text { June } 10 & \text { Purchased } 20 \text { units at } \$ 80 \
\hline \text { October 30 } & \text { Sold } 15 \text { units } \
\hline
\end{array}$$ 
- What would the company's Cost of goods sold be on the December 31,2013 income statement if the perpetual First-In,First-Out costing method is used? (Answers are rounded to the nearest dollar.)

Quizplus · Accepted Answer

Under FIFO, the oldest inventory costs are used first. The cost of goods sold for the 8 units sold on March 10 is 8 units x $70 = $560. For the 15 units sold on October 30, 2 units are from the remaining beginning inventory at $70 (2 x $70 = $140) and 13 units from the June purchase at $80 (13 x $80 = $1,040). Total COGS = $560 + $140 + $1,040 = $1,740.

Samson Company Had the Following Balances and Transactions During 2013