Question

Bramble Company uses a periodic inventory system. Details for the inventory account for the month of January, 2018 are as follows: Units Per unit price Total Balance, 1/1/18 200 $6.00 $1200 Purchase, 1/15/18 70 5.30 371 Purchase, 1/28/18 70 5.40 378 An end of the month (1/31/18) inventory showed that 85 units were on hand. If the company uses FIFO and sells the units for $12 each, what is the gross profit for the month

Answer 1

Bramble Company

The gross profit for the month is:

$2,588.50

Step-by-step explanation:

a) Data and Calculations:

Selling price = $12

Date Units Per unit price Total Balance,

Beginning Inventory 1/1/18 200 $6.00 $1,200

Purchase, 1/15/18 70 5.30 371

Purchase, 1/28/18 70 5.40 378

Cost of goods available 340 $1,949

Calculating the cost of goods available for sale allocated to, using FIFO:

Ending inventory 1/31/18 85 (70 * $5.40 + 15 * $5.30) = $457.50

Cost of goods sold, 255 units ($6.00 * 200 + 55 * $5.30) $1,491.50

Income Statement, December 31, 2018:

Sales Revenue = ($12 * 340) $4,080.00

Cost of goods sold 1,491.50

Gross profit $2,588.50