Your Corporation uses a FIFO perpetual inventory system.
|August 2||10 units were purchased at $12 per unit.|
|August 18||15 units were purchased at $14 per unit.|
|August 29||12 units were sold.|
What was the amount of the cost of goods sold for this sale?
Cost of Goods Sold
Cost of Goods Sold (CoGS)refers to the expense recognized to the books upon selling of a merchandise for a business following perpetual inventory system. There are two sets of journal entries being prepared under the aforementioned inventory system, the first on is recording of the sales revenue, and lastly, the recognition of CoGS by debiting it and crediting Merchandise Inventory.
Answer and Explanation: 1
The Cost of Goods Sold of this company is computed as follows:
12 sold units taken from
|Aug. 02||Purchase of 10 units @ $12 (10 x $12)||$120|
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fromChapter 3 / Lesson 13
The cost of goods is the expenses used to produce products, provide services, or acquire inventory. Study the definition of cost of goods and how to calculate it in this lesson.