23. Zeandale Company has a perpetual inventory system and uses the FIFO method o
ID: 2375909 • Letter: 2
Question
23. Zeandale Company has a perpetual inventory system and uses the FIFO method of inventory costing. Zeandale had a beginning inventory of 60 units and reported the following events during the month of June:
Number of Units
Date
Event
Bought
Sold
Unit Price
June 1
Beginning Inv.
60
$15
3
Purchase
35
16
5
Sale
50
10
Purchase
120
17
16
Sale
75
21
Sale
40
25
Purchase
155
18
30
Sale
120
The cost of goods sold for the June 5 sale is:
$785
$800
$750
$700
Number of Units
Date
Event
Bought
Sold
Unit Price
June 1
Beginning Inv.
60
$15
3
Purchase
35
16
5
Sale
50
10
Purchase
120
17
16
Sale
75
21
Sale
40
25
Purchase
155
18
30
Sale
120
Explanation / Answer
Hi,
Please find the answer as follows;
COGS (FIFO) = 50*15 = 750 (Opening Inventory Items will be utilized to meet the sales of 50 units on June 5 as FIFO method is followed)
Option C(750) is correct.
Thanks.
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