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grays company has the following purchases and sales during the month of august. using the fifo perpetual inventory method, what amount will be reported as cost of goods sold for the 12 units that were sold?

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KhiradAfaq

Using the fifo perpetual inventory method, $240 will be reported as cost of goods sold for the 12 units that were sold.

Perpetual FIFO

The first unit of inventory purchased is assumed to be the first unit used or sold under a cost flow tracking system known as perpetual FIFO. Furthermore, this cost flow takes place in a perpetual inventory system, where inventory inflows and outflows are recorded as soon as transactions take place in the inventory records. Whether a periodic inventory system or a perpetual inventory system is utilised, the resulting charge to the cost of goods sold is the same. As a result of its ability to mirror the real movement of commodities through an organisation, perpetual FIFO is one of the most widely used cost flow tracking systems in use today.

Beginning inventory 10 items at $10 = $100 on August 1st
Purchase 20 pieces for $12 each on August 3rd for a total of $240.
6th of August Sales Twelve units were sold.

So,  $240 will be reported as cost of goods sold for the 12 units that were sold.

To learn more about Perpetual FIFO

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