Question

During 2021, a company sells 310 units of inventory for $91 each. The company has the following inventory purchase transactions for 2021: Date Transaction Number of Units Unit Cost Total Cost Jan. 1 Beginning inventory 65 $ 62 $ 4,030 May 5 Purchase 168 63 10,584 Nov. 3 Purchase 186 65 12,090 419 $ 26,704 Calculate ending inventory and cost of goods sold for 2021 assuming the company uses FIFO.

Answer 1

Ending inventory (EI) =$ 7,085 in value and 109 in units

Cost of goods sold (COGS) =$ 19,619 in value and 310 in units

What is FIFO?

First in first out method, that means the good which are produced first or brought first will be sold first.it is used in order to avoid obsolescence of a product.

Given:

Jan1 inventory= 65 units×$62=4,030

May 5 purchased=168 units×$63=10,584

Nov. 3 purchased=186 units×$65=12,094

total=419 units of  $26,704

company sold=310 units $91 each

1. 65 units×$62=4,030
2. 168 units×$63=10,584
3. 77 units × $65 = 5.005

        (add all of them)

 Total COGS 310 units=19,619

• The EI will be the remaining units=419units-310units=109 units
• EI = 109 units × $65 = 7,085
• total inventory value=4,030 + 10,584 + 12,090=26,704
• total inventory -COGS= EI(ending inventory)in units
• 26,704-19,619=7,085

Therefore, ending inventory (EI), Cost of goods sold (COGS) are calculated using FIFO method.

Learn more about FIFO here:

https://brainly.com/question/6352710