A and b please **Perpetual Inventory Using FIFO**Beginning inventory, purchases, and sales for Item Zeta9 are as follows:- **Oct. 1: Inventory** 50 units @ $20- **Oct. 7: Sale** 33 units- **Oct. 15: Purchase** 30 units @ $22- **Oct. 24: Sale** 26 unitsAssuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine:a. The cost of goods sold on October 24 b. The inventory on October 31---**Feedback***Check My Work*a. When the FIFO method is used, costs are included in the cost of goods sold in the order in which they were purchased. Think of your inventory in terms of "layers". Determine how much inventory remains from each layer after each sale.b. The ending inventory is made up of the most recent purchases.**Options:**- Check My Work- Save and Exit- Submit Assignment for Grading*All work saved.*

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A and b please

**Perpetual Inventory Using FIFO**

Beginning inventory, purchases, and sales for Item Zeta9 are as follows:

- **Oct. 1: Inventory**
50 units @ $20

- **Oct. 7: Sale**
33 units

- **Oct. 15: Purchase**
30 units @ $22

- **Oct. 24: Sale**
26 units

Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine:
a. The cost of goods sold on October 24
b. The inventory on October 31

---

**Feedback**

*Check My Work*

a. When the FIFO method is used, costs are included in the cost of goods sold in the order in which they were purchased. Think of your inventory in terms of "layers". Determine how much inventory remains from each layer after each sale.

b. The ending inventory is made up of the most recent purchases.

**Options:**
- Check My Work
- Save and Exit
- Submit Assignment for Grading

*All work saved.*

Expert Solution

Step 1: Introdcution

First in, first out (FIFO) is the simplest method of inventory valuation based on the assumption that commodities acquired or created first are sold first. By using this strategy, clients receive older inventory before receiving newer inventory. Even if there have been recent changes in expenses, the cost of goods sold (COGS) of the oldest inventory is used to assess the value of the ending inventory.

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