Question
Maxell Company uses the FIFO method to assign costs to inventory and cost of goods sold. The company uses a periodic inventory system. Consider the
Maxell Company uses the FIFO method to assign costs to inventory and cost of goods sold. The company uses a periodic inventory system. Consider the following information:
| Date | Description | # of units | Cost per unit |
| January 1 | Beginning inventory | 100 | $5 |
| June 2 | Purchase | 75 | $4 |
| November 5 | Sales | 125 |
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What amounts would be reported as the cost of goods sold and ending inventory balances for the year?
| a. |
Cost of goods sold $625; Ending inventory $175
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| b. |
Cost of goods sold $755; Ending inventory $225
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| c. |
Cost of goods sold $550; Ending inventory $250
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| d. |
Cost of goods sold $600; Ending inventory $200
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