7-53 (15-25 min.)
Under the FIFO cost-flow assumption, the periodic and perpetual
procedures give identical results. The ending inventory will be valued
on the basis of the last purchases during the period.
Beginning Inventory
Purchases
Units
120
290
$
600
2,050
Goods available
Units sold
410
255
2,650
1,465**
Units in ending Inventory
155
1,185*
* 155 units remain in ending inventory
100 will be valued at the $8 cost from the October 21 purchase and
the remaining 55 will be valued at the $7 cost from the May 9
purchase
100 x $8 = $ 800
55 x $7 =
385
$1,185 Ending inventory
** Reconciliation:
255 Units:
Chapter 7
Cost of Goods Sold:
120 x $5 =
$ 600
80 x $6 =
480
55 x $7 =
385
$1,465
Inventories and Cost of Goods Sold
323