Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine (a) the cost of goods sold on October 24 and (b) the inventory on October 31.

The question is incomplete, below is the completed question:

Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales for Item Zeta9 are as follows:

Oct. 1       Inventory              200 units at $30

       7      Sale                       160 units  

      15     Purchase               180 units at $33

      24    Sale                        150 units

Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine (a) the cost of goods sold on October 24 and (b) the inventory on October 31. a. Cost of goods sold on October 24 b. Inventory on October 31

a) cost of goods sold on October 24 = $4,830

b) Inventory on October 31 = 70 units

Explanation:

a) First-in-first-out (FIFO) inventory system is a type of inventory accounting system where the oldest inventory goods are recorded as sold first befor the newer ones.

on October 24, 150 units of goods were sold

Let us calculate the amount of inventory remaining from the old stock after the first sales:

On October 1, the inventory = 200 units at $30/unit

October 7: sales = 160 units

Units remaining = 200 - 160 = 40 units at $30/unit

on October 15, 180 units were purchased at $33

Now, the sales on October 24 = 150 units.

out of these 150 units, using FIFO, the old stock of 40 units at $30 (as calculated above) will be sold first, then the remaining 110 units will be sold from the October 15 purchases.

Therefore total cost of goods sold:

40units at $30 = 40 × 30 = $1200

110 units at $33 = 110 × 33 = $3630

Total cost of goods sold = 3630 + 1200 = $4,830

b) beginning  inventory = 200 units

Sale in Oct. 7 = 160 units

After the sales on Oct. 7, the inventory = 200 - 160 = 40 units

A purchase of 180 units was made on Oct. 15. Therefore, total number of units available on Oct. 15 = 180 + 40 = 220 units

Finally, 150 units were sold on Oct. 24, Therefore the inventory on Oct. 31

= 220 - 150 = 70 units

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