Exercise 8-14 Inventory cost flow methods; perpetual system [LO8-1, 8-4) Altira

Question

Exercise 8-14 Inventory cost flow methods; perpetual system [LO8-1, 8-4) Altira Corporation uses a perpetual inventory system. The following transactions affected its merchandise inventory during the month of August 2018 0.76 points Aug.1 Inventory on hand-3,100 unitsi cost $7.20 each $6.60 each. 8 Purchased 15,500 units for 14 Sold 12,400 units for $13.10 each. 18 Purchased 9,300 units for $5.80 each 25 sold 11,400 units for $12.10 each. 31 Inventory on hand-4,100 units. Exercise 8-14 Part 1 1. Determine the inventory balance Altira would report in its August 31, 2018, balance sheet and the cost of goods sold it would report in its August 2018 income statement using the FIFO method. (Round "Cost per Unit" to 2 decimal places.) Cost ot | Cost per | Goods # of units Goods Sold Inventory Cost of #of of unts Cost per Cost of in enading Cost per Ending per Inventory unitAvailable units Cost per Goods Sold soldu units unit Available for sold $ 0.00 S $ 0.00 s $ 0.00 Purchases August 8 August 18 0.00 0.00 0.00 0.00 0.00 0.00

Explanation / Answer

Solution:

Inventory balance to be reported in balance sheet = $23,780

Cost of goods sold to be reported in income statement = $154,780

Computation of ending inventory COGS under FIFO - Altira Corporation Date Beginning Inventory Purchase Cost of Goods Sold Ending Inventory Qty Rate Amount Qty Rate Amount Qty Rate Amount Qty Rate Amount 1-Aug 3100 $7.20 $22,320.00 0 $0.00 $0.00 0 $0.00 $0.00 3100 $7.20 $22,320.00 8-Aug 3100 $7.20 $22,320.00 15500 $6.60 $102,300.00 0 $0.00 $0.00 3100 $7.20 $22,320.00 15500 $6.60 $102,300.00 14-Aug 3100 $7.20 $22,320.00 0 $0.00 $0.00 3100 $7.20 $22,320.00 6200 $6.60 $40,920.00 15500 $6.60 $102,300.00 9300 $6.60 $61,380.00 18-Aug 6200 $6.60 $40,920.00 9300 $5.80 $53,940.00 0 $0.00 $0.00 6200 $6.60 $40,920.00 9300 $5.80 $53,940.00 25-Aug 6200 $6.60 $40,920.00 0 $0.00 $0.00 6200 $6.60 $40,920.00 4100 $5.80 $23,780.00 9300 $5.80 $53,940.00 5200 $5.80 $30,160.00 Total $154,780.00 $23,780.00

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