These are the purchases and sales of Commodity C during the month of August.A perpetual inventory system is used. Balance on hand 1 August: 10 units $@ \$ 10$ each.
Purchases:
$\begin{array}{lr}
\text { Aug 3 } & 10 \text { units } @ \$ 12 \
\text { Aug 12 } & 6 \text { units } \$ 13 \
\text { Aug 25 } & 12 \text { units } @ \$ 10
\end{array}$
Sales:
Aug $7 \quad 14$ units
Aug $27 \quad 10$ units The value of the stock of Commodity C at 31 August using the FIFO method of costing inventory is:

Question

Quizplus · Accepted Answer

FIFO (First-In, First-Out) method assumes that the first units purchased are the first units sold. Therefore, the cost of goods sold is calculated using the cost of the earliest purchases.Balance on hand 1 August: 10 units @ $10 each = $100Purchases:Aug 3 10 units @ $12 = $120Aug 12 6 units @ $13 = $78Aug 25 12 units @ $10 = $120Total purchases = $318Sales:Aug 7 14 unitsAug 27 10 unitsTotal sales = 24 unitsCost of goods sold (FIFO):10 units @ $10 = $10010 units @ $12 = $1204 units @ $13 = $52Total cost of goods sold = $272Value of stock at 31 August:Total purchases - Total cost of goods sold = $318 - $272 = $46Balance on hand 1 August + Purchases - Sales = $100 + $318 - $240 = $178Therefore, the value of the stock of Commodity C at 31 August using the FIFO method of costing inventory is $146.

These Are the Purchases and Sales of Commodity C During @$10@ \$ 10@$10

These Are the Purchases and Sales of Commodity C During $@ \$ 10$