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ntercontinental, Inc., uses a perpetual inventory system. Consider the following information about its inventory: July 1, purchased 10 units for $910 or $91 per unit; July 3, purchased 15 units for $1,590 or $106 per unit; July 14, sold 20 units; July 17, purchased 20 units for $2,300 or $115 per unit; July 28, purchased 10 units for $1,190 or $119 per unit; July 31, sold 23 units.

Using FIFO, the cost of goods sold for the sale of 23 units on July 31 is ____ and the inventory balance at July 31 is _____.

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Answer:

Using the FIFO (First in First Out) method, the COGS (Cost of goods sold) is $2,600 and the ending inventory is $1,420.

Explanation:

The table showing the COGS and ending inventory by using the method of FIFO:

Ver imagen ranijoshijj97
Parrain

Based on the use of FIFO and the units purchased and sold, the following is true:

  • Cost of goods for the 23 units on July 31 was $2,600.
  • Inventory balance was $1,420.

When you use FIFO, you sell of the goods that were purchased first before others.

Cost of goods sold on July 31

  • 20 units were sold on July 14 which means that these goods came from the opening units on July 1 and the purchases on July 3.

Units left from July 3 would be:

= (Balance July 1 + Purchases July 3) - Sales July 14

= 10 + 15 - 20

= 5 units

The goods sold on July 23 would therefore include 5 units from July 3 and 18 units from July 17.

Cost of sales is:

= ( 5 x 106) + (18 x 115)

= $2,600

Inventory balance on July 31

Inventory balance would be:

= (Units remaining from July 17 purchase x price) + (Units from July 28 purchase x price)

= (2 x 115) + (10 x 119)

= $1,420

Find out more on FIFO at https://brainly.com/question/12883706.