A company purchased 100 units for $30 each on January 31.It purchased 170 units for $25 each on February 28.It sold 170 units for $70 each from March 1 through December 31.If the company uses the first-in,first-out inventory costing method,what is the amount of Cost of Goods Sold on the income statement for the year ending December 31? (Assume that the company uses a perpetual inventory system. )

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Quizplus · Accepted Answer

11ea86d6_821a_f7d8_92b6_2526bf95b30b_TB2804_00 Number of units sold = 170 units.As FIFO is used,100 units will be valued at $30 per unit (Jan 31)and remaining 70 units will be valued at $25 per unit (Feb 28. )
Cost of Goods Sold = ((100 units × $30)+ (70 units × $25))= $3,000 + $1,750 = $4,750

A Company Purchased 100 Units for $30 Each on January