Question

Bloomington Company has the following information related to its inventory account during during 2019. On December 31, 2019, a physical count showed that the firm had 10,000 units in ending inventory. Therefore, 14,000 units were sold during 2019 (i.e,. 24,000 units from above table minus the 10,000 units from the physical count). Show work and put your answer for the following questions. 4 Calculate the dollar amount for ending inventory that would be reported on the December 31, 2019 balance sheet using the FIFO (first-in, first- out) method. Answer 5 Calculate the dollar amount for cost of goods sold that would be reported on the 2019 income statement using the FIFO (first-in, first-out) method.

Answer 1

To calculate ending inventory using the FIFO method, the cost of the last units purchased is used. The cost of goods sold using the FIFO method is calculated by subtracting the cost of the ending inventory from the cost of the units sold.

Step-by-step explanation:

To calculate the dollar amount for ending inventory using the FIFO method, we need to determine the cost of the units sold first. Since the physical count showed that there were 10,000 units in ending inventory, it means that 10,000 units were the last units purchased.

Therefore, the cost of those units will be used for the ending inventory.

To calculate the dollar amount for cost of goods sold using the FIFO method, we subtract the cost of the ending inventory from the cost of the units sold during the year. So in this case, the cost of goods sold would be equal to the cost of the 24,000 units that were sold during 2019, minus the cost of the 10,000 units in the ending inventory.