Question

Calculate the cost of goods available for sale, cost of goods sold, and ending inventory under the FIFO. Assume perpetual inventory system and sold 600 units between January 9 and January 28. (Round your intermediate calculations to 2 decimal places.)

Answer 1

Question Completion:

1. In its first month of operations, Literacy for the Illiterate opened a new bookstore and bought merchandise in the following order: (1) 400 units at $7 on January 1, (2) 600 units at $10 on January 8, and (3) 930 units at $11 on January 29.

Answer:

Literacy for the Illiterate

The cost of goods available for sale = $19,030

The cost of goods sold = $4,800

The cost of ending inventory = $14,230

Explanation:

a) Data and Calculations:

January 1, Purchases       400 units at $7      $2,800

January 8, Purchases      600 units at $10      6,000

January 29, Purchases   930 units at $11      10,230

Cost of goods available for sale (1,930) =   $19,030

January 30, Ending inventory       1,330  = $14,230 (930 * $11 + 400 * $10)

Cost of goods sold =                   600        $4,800 ($19,030 - $14,230)