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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Jessie Stores uses the periodic system of calculating inventory. The following information is available for December of the current year when Jessie sold 500 units of inventory.

Chapter 7, Problem 10RE, Jessie Stores uses the periodic system of calculating inventory. The following information is

Using the FIFO method, calculate Jessie’s inventory on December 31 and its cost of goods sold for December.

To determine

Compute the inventory on December 31 and the cost of goods sold of Store J using FIFO method.

Explanation

First-in-First-Out (FIFO): In this method, items purchased initially are sold first. So, the value of the ending inventory consist the recent cost for the remaining unsold items.

Calculate ending inventory using FIFO method:

ParticularsUnitsPrice per unitAmount
Ending inventory (December 31)400$275$110,000

Table (1)

Cost of goods sold: Cost of goods sold is the total of all the expenses incurred by a company to sell the goods during the given period...

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