J &G sells a variety of school supplies from a store located at Red Mountain Mall. Thebusiness began the second quarter (April to June) of 2009 with 2,000 pencil cases ata total cost of $200,000. The following transactions took place during the quarter.Purchased 3,000 pencil cases on account at a cost of $110 each. Anadditional air freight charge of $2, as well as customs import charge of $3per case was incurred and paid. It is customary for J & G to include freightin as part of the cost of the units in their inventory record.During the month 1, 000 pencil cases were sold at a price of $160 each.April 10April 30May 1A new batch of 3,200 cases was purchased on account at a cost of $352,000.May 1515 of the pencil cases purchased on April 10 were found to be defective andreturned to the supplier.May 28May 31The sales for May were 2,350 pencil cases at a unit selling price of $120.10 of the pencil cases sold at the start of business on May 28 were returnedby the customer.Using the FIFO method, the values of purchases and COGS after accounting for thetransaction on May 1, 2009 are:O a. $697,000 and $100,000O b. $691,000 and $113,000O c. $897,000 and $112,000O d. $688,000 and $112,000

COGS using the FIFO method can be determined by the oldest inventory units sold.

Using the FIFO method, the values of purchases and COGS after accounting for the transaction on May 1, 2009 are: O a. $697,000 and $100,000 O b. $691,000 and $113,000 O c. $897,000 and $112,000 O d. $688,000 and $112,000

Using the FIFO method, the values of purchases and COGS after accounting for the transaction on May 1, 2009 are: O a. $697,000 and $100,000 O b. $691,000 and $113,000 O c. $897,000 and $112,000 O d. $688,000 and $112,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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