Required information[The following information applies to the questions displayed below.]A company began January with 8,000 units of its principal product. The cost of each unit is $7. Inventory transactions for the month of January are as follows:Date of PurchasePurchasesUnitsUnit Cost*Footnote asteriskTotal CostJanuary 106,000$ 8$ 48,000January 188,000972,000Totals14,000 $ 120,000*Footnote asterisk Includes purchase price and cost of freight.SalesDate of SaleUnitsJanuary 54,000January 122,000January 205,000Total11,00011,000 units were on hand at the end of the month. Cost of Goods Sold - January 20Numberof unitssold0Cost perunit$Cost ofGoods Sold7.00 $8.009.00$0000Inventory BalanceNumber ofunits inendinginventory0Cost perunit$EndingInventory7.00 $8.009.00$0000 3. Calculate January's ending inventory and cost of goods sold for the month using FIFO, perpetual system.Perpetual FIFO:Beginning InventoryPurchases:January 10January 18TotalCost of Goods Available for SaleCost ofGoodsCost Available forSaleNumber Unitof units8,000 $7.00 $6,0008,00022,0008.009.00$56,00048,00072,000176,000Cost of Goods Sold - January 5Numberof unitssoldCost perunit$Cost ofGoods Sold7.00 $8.009.00$00O0Cost of Goods Sold - January 12Numberof unitssold0Cost perunit$Cost ofGoods Sold7.00 $8.009.00$000

Perpetual inventory system is a system of maintaining inventory records continuously(in a…

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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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Required information

[The following information applies to the questions displayed below.]

A company began January with 8,000 units of its principal product. The cost of each unit is $7. Inventory transactions for the month of January are as follows:

Date of Purchase	Purchases
Units	Unit Cost*Footnote asterisk	Total Cost
January 10	6,000	$ 8	$ 48,000
January 18	8,000	9	72,000
Totals	14,000		$ 120,000

*Footnote asterisk Includes purchase price and cost of freight.

Date of Sale	Units
Sales
January 5	4,000
January 12	2,000
January 20	5,000
Total	11,000

11,000 units were on hand at the end of the month.

Cost of Goods Sold - January 20
Number
of units
sold
0
Cost per
unit
$
Cost of
Goods Sold
7.00 $
8.00
9.00
$
0
0
0
0
Inventory Balance
Number of
units in
ending
inventory
0
Cost per
unit
$
Ending
Inventory
7.00 $
8.00
9.00
$
0
0
0
0

3. Calculate January's ending inventory and cost of goods sold for the month using FIFO, perpetual system.
Perpetual FIFO:
Beginning Inventory
Purchases:
January 10
January 18
Total
Cost of Goods Available for Sale
Cost of
Goods
Cost Available for
Sale
Number Unit
of units
8,000 $7.00 $
6,000
8,000
22,000
8.00
9.00
$
56,000
48,000
72,000
176,000
Cost of Goods Sold - January 5
Number
of units
sold
Cost per
unit
$
Cost of
Goods Sold
7.00 $
8.00
9.00
$
0
0
O
0
Cost of Goods Sold - January 12
Number
of units
sold
0
Cost per
unit
$
Cost of
Goods Sold
7.00 $
8.00
9.00
$
0
0
0

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