Question

Ong Sai-Yuk Company sells one product. Presented below is information for January for Fong Sai-Yuk Company.

Jan. 1 Inventory 111 units at $4 each
4 Sale 87 units at $8 each
11 Purchase 141 units at $6 each
13 Sale 106 units at $9 each
20 Purchase 168 units at $7 each
27 Sale 108 units at $11 each
Fong Sai-Yuk uses the FIFO cost flow assumption. All purchases and sales are on account.
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Answer 1

FIFO stands for first in first out. This method of inventory management records cost of sales of oldest inventory first.

Jan. 4 dr Account receivable 696

cr sales(87×8) 696

Jan. 11 dr Inventory(141*6) 846

cr Account payable 846

Jan.13 dr Account receivable 742

cr Sales(106*7). 742

Jan. 20 dr Inventory(168*7) 1176

cr Account payable 1176

Jan. 27 dr Account receivable 1188

cr Sales(108*11) 1188

Jan. 31 dr cost of goods sold 1633

cr inventory 1633

87*4=348

24*4=96

82*6=492

59*6=354

49*7=343

COGS= 1633