Answered: Altira Corporation provides the…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 44E: Perpetual and Periodic Inventory Systems Below is a list of inventory systems options. a. Perpetual...

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Altira Corporation provides the following information related to its merchandise inventory during the month of August 2021:


Aug.1	Inventory on hand—3,700 units; cost $7.80 each.
8	Purchased 18,500 units for $7.20 each.
14	Sold 14,800 units for $13.70 each.
18	Purchased 11,100 units for $6.40 each.
25	Sold 13,800 units for $12.70 each.
28	Purchased 5,700 units for $5.80 each.
31	Inventory on hand—10,400 units.

Required:
1. Using calculations based on a perpetual inventory system, determine the inventory balance Altira would report in its August 31, 2021, balance sheet and the cost of goods sold it would report in its August 2021 income statement using the FIFO method.

equired:
- Using calculations based on a perpetual inventory system, determine the inventory balance Altira would report in its August 31,
021, balance sheet and the cost of goods sold it would report in its August 2021 income statement using the FIFO method.
Cost of Goods Available for Sale
Cost of Goods Sold- August 14
Cost of Goods Sold - August 25
Inventory Balance
Cost of
Goods
Available for
Sale
Perpetual FIFO:
Cost per
unit
# of
units
sold
# of units
in
Cost per
Cost of
Goods Sold
# of units
sold
# of units
Cost per
unit
Cost of
Goods Sold
Total Cost of
Goods Sold
Cost per
Ending
Inventory
unit
unit
inventory
Beg. Inventory
3,700 $ 7.80 $
28,860
3,700
24
7.80
28,860
2$
2$
7.80
2$
7.80 $
0.
Purchases:
August 8
18,500
7.20
133,200
11,100
7,400
7.20
79,920
7.20
53,280
7.20
August 18
11,100
6.40
71,040
6.40
6.40
6.40
August 28
5,700
5.80
33,060
5.80
5.80
5.80
Total
39,000
$266,160
14,800
$108,780
7,400
53,280 $
162,060
24
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