Use this inventory information for the month of May to answer the following question. $$\begin{array} { r r l l }
\text { May } &1& \text { Begnning inventory } & \text { 20 units @ } 76 \
& 7 & \text { Purchase } & 70 \text { units @ } \$ 80 \
&18 & \text { Sale } & 25 \text { units } \
&22 & \text { purchase } & 10 \text { units @ } \$ 88 \
&29 & \text { Sale } & 40 \text { units }
\end{array}$$
Assuming that a periodic inventory system is used,what is cost of goods sold on a FIFO basis?

Question

Use this inventory information for the month of May to answer the following question. $$\begin{array} { r r l l } 
\text { May } &1& \text { Begnning inventory } & \text { 20 units @ } 76 \
& 7 & \text { Purchase } & 70 \text { units @ } \$ 80 \
&18 & \text { Sale } & 25 \text { units } \
&22 & \text { purchase } & 10 \text { units @ } \$ 88 \
&29 & \text { Sale } & 40 \text { units }
\end{array}$$
 Assuming that a periodic inventory system is used,what is cost of goods sold on a FIFO basis?

Quizplus · Accepted Answer

Under FIFO, the oldest inventory costs are used first. The cost of goods sold for 65 units (25 units on May 18 and 40 units on May 29) is calculated as: 20 units @ $76 + 45 units @ $80 = $5,120.

Use This Inventory Information for the Month of May to Answer