Inventory Method FIFO

When costs are __________, FIFO also produces the lowest __________ and the highest net income.

increasing; cost of goods sold (COGS)

Under the FIFO method, a business has 2 units on hand worth $200 as of July 1 and purchases 4 units at $250 each on July 7. On July 8, 2 units are sold. What is the value of inventory on hand?

$1,000

On May 1, Fernando's Furniture had a beginning inventory of 10 units costing $250 each. On May 14, Fernando's Furniture purchased 8 units costing $300 each. On May 15, Fernando's Furniture sold 15 units. Which of the following is true if the FIFO method is used?

All units costing $250 were sold on May 15

Use the following data to find the cost of goods sold if 70 units were sold on June 10. Assume the FIFO method is used. Date Description Units Unit Cost Total Cost June 01 Beginning Inventory 100 $20 $2000 June 7 Inventory purchased 50 $35 $1750 June 15 Inventory purchased 200 $15 $3000

$1400

Use the following data to find the cost of goods sold if 6 units were sold on October 15. Assume the FIFO method is used. Date Description Units Unit Cost Total Cost October 01 Beginning Inventory 5 $50 $250 October 12 Inventory purchased 8 $60 $480

$310

On May 1, Fernando's Furniture had a beginning inventory of 10 units costing $250 each. On May 14, Fernando's Furniture purchased 8 units costing $300 each. On May 15, Fernando's Furniture sold 13 units. What was the total cost of goods sold on May 15 if the FIFO method is used?

$3400

Use the following data to answer the question. Assume the FIFO method is used. Suppose 10 units were sold on October 24. What is the total cost of inventory on hand? Date Description Units Unit Cost Total Cost October 01 Beginning Inventory 5 $50 $250 October 12 Inventory purchased 8 $60 $480 October 23 Inventory purchased 20 $10 $200

$380

Use the following data to find the cost of goods sold if 170 units were sold on June 16. Assume the FIFO method is used. Date Description Units Unit Cost Total Cost June 01 Beginning Inventory 100 $20 $2000 June 7 Inventory purchased 50 $35 $1750 June 15 Inventory purchased 200 $15 $3000

$4050

Use the following data to determine which of the following statements is true. Assume the FIFO method is used. Date Description Units Unit Cost Total Cost October 01 Beginning Inventory 5 $50 $250 October 12 Inventory purchased 8 $60 $480 October 23 Inventory purchased 20 $10 $200

On October 12 the total cost of goods on hand is $730

Use the following data to determine which of the following statements is true. Assume the FIFO method is used. Date Description Units Unit Cost Total Cost October 01 Beginning Inventory 5 $50 $250 October 12 Inventory purchased 8 $60 $480 October 23 Inventory purchased 20 $10 $200

On October 23 the total cost of goods on hand is $930

What does the FIFO method assume?

The first items placed in inventory are the first items sold

Use the following data to determine which of the following statements is true. Assume the FIFO method is used. Date Description Units Unit Cost Total Cost October 01 Beginning Inventory 5 $50 $250 October 12 Inventory purchased 8 $60 $480 October 23 Inventory purchased 20 $10 $200

On October 1 the total cost of goods on hand is $250

Which of the following is true about Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS)?

They both allow the FIFO inventory method to be used

On May 1, Fernando's Furniture had a beginning inventory of 10 units costing $250 each. On May 14, Fernando's Furniture purchased 8 units costing $300 each. On May 15, Fernando's Furniture sold 15 units. Which of the following is true if the FIFO method is used?

Three units costing $250 each were left on May 15

Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) __________ allow __________ inventory method to be used.

both; first in, first out

Which of the following questions correctly completes the sentence? The use of FIFO assumes ________________ better reflect replacement cost because they are the most recently purchased or produced.

remaining inventory costs