Altira Corporation provides the following information related to its inventory during the month of August 2024:August 1Inventory on hand—2,300 units; cost $6.40 each.August 8Purchased 11,500 units for $5.80 each.August 14Sold 9,200 units for $12.30 each.August 18Purchased 6,900 units for $5.00 each.August 25Sold 8,200 units for $11.30 each.August 28Purchased 4,300 units for $5.80 each.August 31Inventory on hand—7,600 units.1. Using calculations based on a perpetual inventory system, determine the inventory balance Altira would report in its August 31, 2024, balance sheet and the cost of goods sold it would report in its August 2024 income statement using the FIFO method. ### Perpetual FIFO Inventory SystemThis table provides a detailed view of inventory management through the Perpetual FIFO (First-In, First-Out) method. It tracks the cost of goods available for sale, the cost of goods sold on specified dates, and the inventory balance.---#### Table Overview1. **Cost of Goods Available for Sale:** - **Beginning Inventory:** - Units: 2,300 - Cost per unit: $6.40 - Total Cost: $14,720 - **Purchases:** - **August 8:** - Units: 11,500 - Cost per unit: $5.80 - Total Cost: $66,700 - **August 18:** - Units: 6,900 - Cost per unit: $5.00 - Total Cost: $34,500 - **August 28:** - Units: 4,300 - Cost per unit: $5.80 - Total Cost: $24,940 - **Total:** - Units: 25,000 - Total Cost: $140,8602. **Cost of Goods Sold:** - **August 14:** - Units Sold: 2,300 - Cost per unit: $6.40 - Total Cost of Goods Sold: $14,720 - **August 25:** - Units Sold: 0 - Total Cost of Goods Sold: $0 - **Total Cost of Goods Sold:** - $14,7203. **Inventory Balance:** - **Ending Inventory:** - Units Remaining: 0 - Cost per unit: $0 - Total Ending Inventory: $0---This table is a simple illustration of how perpetual FIFO accounting works in practice, showing how costs are assigned to both goods sold and those remaining in inventory. The FIFO method assumes that the oldest inventory items are sold first, which is reflected in this table with the costs being effectively allocated.

Name: Altira Corporation provides the following information related to its i
Uploaded: 2024-03-20T06:32:37.000Z
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Description: Altira Corporation provides the following information related to its inventory during the month of August 2024:August 1Inventory on hand—2,300 units; cost $6.40 each.August 8Purchased 11,500 units for $5.80 each.August 14Sold 9,200 units for $12.30 e

The inventory can be valued using various methods as FIFO, LIFO and average method. Using FIFO, the older inventory is sold out and newer inventory is left in the stock.Perpetual FIFO:Cost of goods available for saleCost of goods sold- Aug 14Cost of goods sold- Aug 25Inventory balanceNumber of unitsCost per unitCost of goods available for saleNumber of units soldCost per unitCost of goods soldNumber of units soldCost per unitCost of goods soldTotal cost of goods soldNumber of unitsCost per unitEnding inventoryBeg. inventory2,300$6.40$14,7202,300$6.40$14,720Purchases:Aug 811,500$5.80$66,7006,900$5.80$40,0204,600$5.80$26,680Aug 186,900$5.00$34,5003,600$5$18,0003,300$5$16,500Aug 284,300$5.80$24,9404,300$5.80$24,940Total25,000$140,8609,200$54,7408,200$44,680$99,4207,600$41,440Cost of goods sold = $99,420Cost of ending inventory = $41,440

Answered: Perpetual FIFO: Beginning Inventory…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Altira Corporation provides the following information related to its inventory during the month of August 2024:

August 1	Inventory on hand—2,300 units; cost $6.40 each.
August 8	Purchased 11,500 units for $5.80 each.
August 14	Sold 9,200 units for $12.30 each.
August 18	Purchased 6,900 units for $5.00 each.
August 25	Sold 8,200 units for $11.30 each.
August 28	Purchased 4,300 units for $5.80 each.
August 31	Inventory on hand—7,600 units.

1. Using calculations based on a perpetual inventory system, determine the inventory balance Altira would report in its August 31, 2024, balance sheet and the cost of goods sold it would report in its August 2024 income statement using the FIFO method.

### Perpetual FIFO Inventory System

This table provides a detailed view of inventory management through the Perpetual FIFO (First-In, First-Out) method. It tracks the cost of goods available for sale, the cost of goods sold on specified dates, and the inventory balance.

---

#### Table Overview

1. **Cost of Goods Available for Sale:**
- **Beginning Inventory:**
- Units: 2,300
- Cost per unit: $6.40
- Total Cost: $14,720

- **Purchases:**
- **August 8:**
- Units: 11,500
- Cost per unit: $5.80
- Total Cost: $66,700
- **August 18:**
- Units: 6,900
- Cost per unit: $5.00
- Total Cost: $34,500
- **August 28:**
- Units: 4,300
- Cost per unit: $5.80
- Total Cost: $24,940

- **Total:**
- Units: 25,000
- Total Cost: $140,860

2. **Cost of Goods Sold:**
- **August 14:**
- Units Sold: 2,300
- Cost per unit: $6.40
- Total Cost of Goods Sold: $14,720
- **August 25:**
- Units Sold: 0
- Total Cost of Goods Sold: $0

- **Total Cost of Goods Sold:**
- $14,720

3. **Inventory Balance:**
- **Ending Inventory:**
- Units Remaining: 0
- Cost per unit: $0
- Total Ending Inventory: $0

---

This table is a simple illustration of how perpetual FIFO accounting works in practice, showing how costs are assigned to both goods sold and those remaining in inventory. The FIFO method assumes that the oldest inventory items are sold first, which is reflected in this table with the costs being effectively allocated.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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