Inventory Costing Methods-Periodic Method Chen Sales Corporation uses the periodic inventory system. On January 1, 2012, Chen had: 1,000 units of product A with a unit cost of $70 per unit. A summary of purchases and sales during 2012 follows: Unit Units Units Cost Purchased Sold Feb.2 400 Apr.6 $72 1,800 July 10 1,600 Aug.9 76 800 Oct.23 800 Dec.30 79 1,200 2:17 PM
Inventory Costing Methods-Periodic Method Chen Sales Corporation uses the periodic inventory system. On January 1, 2012, Chen had: 1,000 units of product A with a unit cost of $70 per unit. A summary of purchases and sales during 2012 follows: Unit Units Units Cost Purchased Sold Feb.2 400 Apr.6 $72 1,800 July 10 1,600 Aug.9 76 800 Oct.23 800 Dec.30 79 1,200 2:17 PM
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter5: Inventories And Cost Of Goods Sold
Section: Chapter Questions
Problem 5.11E: Inventory Costing Methods VanderMeer Inc. reported the following information for the month of...
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Meaning of FIFO Method :-
FIFO stands for “First-In, First-Out”. The FIFO method assumes that the oldest products in a company’s inventory have been sold first. The costs paid for those oldest products are the ones used in the calculation.
Statement for Calculation of Cost of Goods Sold
Particulars Units Rate Amount
Sold Feb 2 | 400 | 70 | 28000 |
Sold July 10 | 600 | 70 | 42000 |
Sold July 10 | 1000 | 72 | 72000 |
Sold Oct 23 | 800 | 72 | 57600 |
Total | $199,600 |
Statement for Calculation of Ending Inventory Balance
Particulars | Units | Rate | Total |
Opening Inventory | 1000 | 70 | 70000 |
Sold Feb 2 | 400 | 70 | 28000 |
Balance | 600 | 70 | 42000 |
Purchase Apr 6 | 1800 | 72 | 129600 |
Balance | 2400 | 171600 | |
Sold July 10 | 600 | 70 | 42000 |
Sold July 10 | 1000 | 72 | 72000 |
Balance | 800 | 57600 | |
Purchase `Aug 9 | 800 | 76 | 60800 |
Balance | 1600 | 118400 | |
Sold Oct 23 | 800 | 72 | 57600 |
Balance | 800 | 60800 | |
Purchase Dec 30 | 1200 | 79 | 94800 |
Balance | 2000 | $155,600 |
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