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Concord Company uses a periodic inventory system
Concord Company uses a periodic inventory system. For April, when the company sold 550 units, the following information is available.
Units
Unit Cost
Total Cost
April 1 inventory
260$15$ 3,900April 15 purchase
430187,740April 23 purchase
310
206,200
1,000
$17,840
Compute the April 30 inventory and the April cost of goods sold using the FIFO method.
Ending inventory
$enter a dollar amount
Cost of goods sold
$enter a dollar amount
Expert Solution
Computation of April 30 inventory and the April cost of goods sold using the FIFO method:
For April, when the companies sold 550 units. In FIFO Method first purchase units will be sold first.
So,
Cost of Goods Sold = 260 units*$15 + (550-260)*$18
= 260 units*$15 + 290 units*$18
= $3,900 + $5,220
Cost of Goods Sold = $9,120
Ending Inventory = Opening inventory + Purchases - Sales
= 260 + (430 + 310) - 550
= 260 +740 - 550
= 450 units
Value of Ending Inventory = (140 units * $18) + (310units * $20)
= $2520 + $6200
Value of Ending Inventory = $8720
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