A company had beginning Inventory of I1 units at a cost of 9

A company had beginning Inventory of I1 units at a cost of $9 each on March 1. On March 2, it purchased ft units at $16 each. On March 6 it purchased 5 units at $16 each On March 8, it sold 25 units for $59 each. Using the FIFO perpetuel inventory method, what was the cost of the 25 units sold? $323 O $275 O $400 O $355 O $243

Solution

Answer to Question 1:

Number of units sold includes 11 units from beginning inventory, 11 units from March 2 purchase and 3 units from March 6 purchase.

Cost of Goods Sold = 11 * $9 + 11 * $16 + 3 * $16
Cost of Goods Sold = $323

Answer to Question 2:

Insurance Expense during the year = $33,600 * 8/24
Insurance Expense during the year = $11,200

Answer to Question 3:

Subscription Expense during the year = $2,160 * 9/36
Subscription Expense during the year = $540

Balance of Prepaid Subscription = $2,160 - $540
Balance of Prepaid Subscription = $1,620