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23 April, 02:21

The following are the transactions for the month of July:

Units Unit Cost Unit Selling Price

July 1 Beginning Inventory 50 $10

July 13 Purchase 250 13

July 25 Sold (100) $15

July 31 Ending Inventory 200

Calculate the cost of goods available for sale and ending inventory, then sales, cost of goods sold, and gross profit, under FIFO. Assume a periodic inventory system is used. (Round "Cost per Unit" to 2 decimal places and your final answers to the nearest whole dollar amount.)

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  1. 23 April, 04:05
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    Cost of goods available for sale is $ 3,750

    Ending inventory is $2,600

    Sales is $1,500

    cost of goods sold is $1,150

    gross profit is $ 350

    Explanation:

    FIFO Method is an Inventory System that Sells First the Oldest Inventory.

    A periodic inventory system calculates the Cost of Inventory with each sale made rather than after a period (Periodic)

    Cost of goods available for sale

    Cost of goods available for sale = Opening Stock + Purchases

    = (50 * $10) + (250 * $13)

    = $ 3,750

    Ending inventory

    July 31 : 200 * $13 = $2,600

    Sales

    July 25 : 100 * $15 = $1,500

    cost of goods sold

    July 25 : 50 * $10 = $500

    50 * $13 = $650

    Total = $1,150

    gross profit

    Gross Profit = Sales - cost of goods sold

    = $1,500 - $1,150

    = $ 350
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