Question 5 10 points Alpha Company uses the periodic invento

Question 5 (10 points)

Alpha Company uses the periodic inventory system and had the following inventory & sales activity for the month of May 2016:

Date

5/1

ACTIVITY

Beginning Inventory

QUANTITY

100

UINIT PRICE

$12

DATE

5/5

ACTIVITY

Purchase

QUANTITY

200

UNIT PRICE

$13

DATE

5/15

ACTIVITY

Purchase

QUANTITY

300

UNIT PRICE

$14

DATE

5/25

ACITIVITY

Purchase

QUANTITY

200

UNIT PRICE

$15

Sales were 500 units, Ending Inventory was 300. Using the FIFO method, determine the dollar values following for the month of May: 1. Ending Inventory 2. Cost of Goods Available for Sale 3. Cost of Goods Sold

Solution

Calculate following :

1) Ending inventory = (200*15+100*14) = $4400

2) Cost of goods available for sale = $11000

3) Cost of goods sold = 11000-4400 = $6600