Torres Company purchased 2,000 units of inventory that cost $2.00 each on January 1, 2013. An additional 3,000 units of inventory were purchased on January 12, 2013 at a cost of $2.10 each. Torres Company sold 4,000 units of inventory on January 20, 2013. Which of the following entries would be required to recognize the cost of goods sold assuming that Torres Co. uses the perpetual inventory method and a FIFO cost flow method?

Question

Quizplus · Accepted Answer

(2,000 x $2.00) + (2,000 x $2.10) = $8,200; The journal entry to recognize cost of goods sold is a debit (increase) to cost of goods sold and a credit (decrease) to inventory.

Torres Company Purchased 2,000 Units of Inventory That Cost $2