Comprehensive Do it! 1 on page 280 showed cost of goods sold computations under a periodic inventory system. Now let’s assume that Gerald D. Englehart Company uses a perpetual inventory system. The company has the same inventory, purchases, and sales data for the month of March as shown earlier:
|
Inventory: |
March 1 |
200 units @ $4.00 |
$ 800 |
|
Purchases: |
March 10 |
500 units @ $4.50 |
2,250 |
|
March 20 |
400 units @ $4.75 |
1,900 |
|
|
March 30 |
300 units @ $5.00 |
1,500 |
|
|
Sales: |
March 15 |
500 units |
|
|
March 25 |
400 units |
The physical inventory count on March 31 shows 500 units on hand.
Instructions
Under a perpetual inventory system, determine the cost of inventory on hand at March 31 and the cost of goods sold for March under (a) FIFO, (b) LIFO, and (c) average cost.