Scribd Logo
Upload

Welcome to Scribd!

  • Fifo Method

    Uploaded by

    Anchal Maheshwary
    37 views2 pages
    Charley's dairy store uses FIFO to value its milk inventory. In November, it purchased 7 gallons for $2 each on the 2nd, 7 gallons for $2.40 each on the 6th, 2 gallons for $2.90 each on the 13th. It sold 7 gallons on the 8th and 6 gallons on the 14th. To calculate ending inventory and cost of goods sold on the 15th, the earliest purchases would be deducted from sales first under FIFO. Bike Ltd purchases bikes throughout January and sells some. Using FIFO, earlier purchases are deducted from sales first to calculate ending inventory. On January 1st it bought 5 bikes for $50 each. It sold some

    Original Description:

    Original Title

    Untitled

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    Charley's dairy store uses FIFO to value its milk inventory. In November, it purchased 7 gallons for $2 each on the 2nd, 7 gallons for $2.40 each on the 6th, 2 gallons for $2.90 each on the 13th. It sold 7 gallons on the 8th and 6 gallons on the 14th. To calculate ending inventory and cost of goods sold on the 15th, the earliest purchases would be deducted from sales first under FIFO. Bike Ltd purchases bikes throughout January and sells some. Using FIFO, earlier purchases are deducted from sales first to calculate ending inventory. On January 1st it bought 5 bikes for $50 each. It sold some

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    37 views2 pages

    Fifo Method

    Uploaded by

    Anchal Maheshwary
    Charley's dairy store uses FIFO to value its milk inventory. In November, it purchased 7 gallons for $2 each on the 2nd, 7 gallons for $2.40 each on the 6th, 2 gallons for $2.90 each on the 13th. It sold 7 gallons on the 8th and 6 gallons on the 14th. To calculate ending inventory and cost of goods sold on the 15th, the earliest purchases would be deducted from sales first under FIFO. Bike Ltd purchases bikes throughout January and sells some. Using FIFO, earlier purchases are deducted from sales first to calculate ending inventory. On January 1st it bought 5 bikes for $50 each. It sold some

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    FIFO METHOD

    1. Charley's, a local dairy store, maintains milk inventory by the gallon. The first
    month’s milk purchases and sales at its Chazy, NY, location follow:
    November 2 Purchased 7 gallons at $2.00 each.
    November 6 Purchased 7 gallons at $2.40 each.
    November 8 Sold 7 gallons of milk to customers.
    November 13 Purchased 2 gallons at $2.90 each.
    November 14 Sold 6 gallons of milk to customers.
    Determine the amount that would be reported in ending merchandise inventory and
    amount of Cost of Goods sold on November 15 using the FIFO inventory costing
    method.

    Consider the following:

     April 01: Inventories on hand are 50 units at $2 and 100 units at $4.50

     April 05: Purchased 100 units at $1.80

     April 06: 10 units of inventories purchased on 5 April at $1.80 are


    returned to the supplier

     April 10: 80 units issued to factory

     April 15: 50 units issued to factory

     April 20: 20 units purchased at $1.50

     April 25: 70 units issued to factory

     April 30: 50 units purchased at $1.70

     April 30: 10 units returned to store out of units issued to the factory on
    25 April
    2. Bike LTD purchased 10 bikes during January and sold 6 bikes, details of which are as
    follows:
    January 1 Purchased 5 bikes @ $50 each
    January 5 Sold 2 bikes
    January 10 Sold 1 bike
    January 15 Purchased 5 bikes @ 70 each
    January 25 Sold 3 bikes
    The value of 4 bikes held as inventory at the end of January may be calculated
    as follows:
    The sales made on January 5 and 10 were clearly made from purchases on 1st
    January. Of the sales made on January 25, it will be assumed that 2 bikes relate
    to purchases on January 1 whereas the remaining one bike has been issued
    from the purchases on 15th January. Therefore, the value of inventory under
    FIFO 

    3.

    You might also like