2/3 Purchases 900 books at #1,000 each 4/3 Purchases 590 books at ₦950 each 15/3 Sales 300 books at #900 eachDetermine the cost of goods sold using FIFO

Answer Details

To determine the cost of goods sold using the FIFO (First-In, First-Out) method, we assume that the first items purchased are the first items sold. Here's how we can calculate the cost of goods sold using the FIFO method based on the given information: 1. First, we calculate the total cost of books purchased on 2/3. Quantity purchased = 900 Cost per book = #1,000 Total cost = Quantity purchased x Cost per book = 900 x #1,000 = #900,000 Therefore, the total cost of books purchased on 2/3 is #900,000. 2. Next, we calculate the total cost of books purchased on 4/3. Quantity purchased = 590 Cost per book = ₦950 Total cost = Quantity purchased x Cost per book = 590 x ₦950 = ₦560,500 Therefore, the total cost of books purchased on 4/3 is ₦560,500. 3. We calculate the total cost of goods available for sale by adding the total cost of books purchased on 2/3 and 4/3. Total cost of goods available for sale = #900,000 + ₦560,500 = #1,460,500 Therefore, the total cost of goods available for sale is #1,460,500. 4. Next, we calculate the cost of goods sold using the FIFO method. According to the given information, 300 books were sold on 15/3. We assume that these are the first 300 books purchased. Quantity sold = 300 Cost per book = cost of the oldest book available = #1,000 (because the books purchased on 2/3 were the oldest) Total cost of goods sold = Quantity sold x Cost per book = 300 x #1,000 = #300,000 Therefore, the cost of goods sold using the FIFO method is #300,000. Hence, the correct option is #300,000.