Applying and Analyzing Inventory Costing Methods At the beginning of the current period, Chen carried 1,000 units of its product with a unit cost of $32. A summary of purchases during the current period follows. Units Unit Cost Cost Beginning Inventory 1,000 $32 $32,000 Purchase #1 1,800 34 61,200 Purchase #2 800 38 30,400 Purchase #3 1,200 41 49,200 During the current period, Chen sold 2,800 units. (a) Assume that Chen uses the first-in, first-out method. Compute both cost of good sold for the current period and the ending inventory balance. Use the financial statement effects template to record cost of goods sold for the period. Ending inventory balance $Answer Cost of goods sold $Answer Use negative signs with answers, when appropriate. Balance Sheet Transaction Cash Asset + Noncash Assets = Liabilities + Contributed Capital + Earned Capital Record FIFO cost of goods sold Income Statement Revenue - Expenses = Net Income

Balance Sheet
Transaction	Cash Asset	+	Noncash Assets	=	Liabilities	+	Contributed Capital	+	Earned Capital
Record FIFO cost of goods sold

Income Statement
Revenue	-	Expenses	=	Net Income