Question

during 2024, a company sells 270 units of inventory for $94 each. the company has the following inventory purchase transactions for 2024.
date\ttransaction\tnumber of units\tunit cost\ttotal cost
january 1\tbeginning inventory\t67\t$66\t$4,422
may 5\tpurchase\t161\t67\t10,787
november 3\tpurchase\t188\t69\t12,972
\t\t416\t\t$28,181
calculate ending inventory and cost of goods sold for 2024 assuming the company uses fifo.
ending inventory
cost of goods sold

Explanation:

Step1: Determine units sold and available

The company sold 270 units and had 416 units available for sale.

Step2: Calculate cost of goods sold using FIFO

First, use up the beginning - inventory of 67 units at $66 each. Cost = $66×67 = $4,422.
Then, use 270 - 67=203 units from the May 5 purchase. Cost of these units = $67×203 = $13,601.
Total cost of goods sold = $4,422 + $13,601 = $18,023.

Step3: Calculate ending inventory

Ending inventory units = 416 - 270 = 146 units.
These 146 units come from the November 3 purchase. Cost of ending inventory = $69×146 = $10,074.

Answer:

Ending inventory: $10,074
Cost of goods sold: $18,023