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Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine (a) the cost of goods sold on January 25 and (b) the inventory on January 31.

Assuming a perpetual inventory system and using the firstin firstout FIFO method determine a the cost of goods sold on January 25 and b the inventory on January class=

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The COGS on January 25 is $5,030 and the inventory on January 31 is $2,970.

On January 1 the Inventory is 60 units at $100 for a total of $6,000.

On January 9 there are 35 units sold with a cost of $100 for a total of $3,500. After this sale the total cost of inventory is $6,000 - $3,500 = $2,500.

On January 1 50 units are purchased for $110 for a total of $5,500. The current value of inventory is $2,500 + $5,500 = $8,000.

On January 25 there are 48 units sold. This consists of the remaining 25 units at $100 and 23 additional units at $110. (25 x 100) + (23 x 110) = $5,030. The remaining inventory after this sale is $8,000 - $5,030 = $2,970.

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