Schemmenti Inc. uses a period inventory system. Its records show the following for the month of...
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Schemmenti Inc. uses a period inventory system. Its records show the following for the month of December: Date December 1 December 16 December 22 Total Inventory, beginning Purchase Purchase Number of units 60 100 120 280 Cost per unit $54 $51 $50 [Note: in this problem, we are in a period of decreasing prices.] Total cost $3,240 $5,100 $6,000 $14,340 A physical inventory count at the end of December reveals that 50 units remain in ending inventory. Compute ending inventory for the month of December for Schemmenti Inc., assuming the company uses the first-in, first-out (FIFO) inventory costing method. Schemmenti Inc. uses a period inventory system. Its records show the following for the month of December: Date December 1 December 16 December 22 Total Inventory, beginning Purchase Purchase Number of units 60 100 120 280 Cost per unit $54 $51 $50 [Note: in this problem, we are in a period of decreasing prices.] Total cost $3,240 $5,100 $6,000 $14,340 A physical inventory count at the end of December reveals that 50 units remain in ending inventory. Compute ending inventory for the month of December for Schemmenti Inc., assuming the company uses the first-in, first-out (FIFO) inventory costing method.
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Using the FIFO method we assume that the units sold during the month came from the earliest purchases and the ending inventory consists of the most recent purchases To compute the cost of goods sold we first need to determine the number of units sold during the month Beginning inventory 60 units Purchases December 16 100 units December 22 120 units Total purchases 100 120 220 units Total units available for sale 60 220 280 units Units sold 280 50 ending inventory 230 units Using the FIFO method we assume that the 230 units sold consisted of December 1 beginning inventory 60 units December 16 purchase 100 units 70 units from the December 22 purchase remaining units after accounting for the 50 units in ending inventory The cost of goods sold can be computed as follows December 1 beginning inventory 60 units x 54 3240 December 16 purchase 100 units x 51 5100 December 22 purchase 70 units x 50 3500 Total cost of goods sold 3240 5100 3500 11840 To compute the cost of ending inventory we only need to consider the most recent purchase ... View the full answer
Related Book For
Financial Accounting Tools for Business Decision Making
ISBN: 978-0470239803
5th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Posted Date:
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