{"id":1210,"date":"2021-09-28T00:14:51","date_gmt":"2021-09-28T00:14:51","guid":{"rendered":"https:\/\/alminawi.com\/?p=1133"},"modified":"2021-09-28T00:14:51","modified_gmt":"2021-09-28T00:14:51","slug":"example-fifo-comparison-with-multiple-sales-periodic-vs-perpetual-inventory","status":"publish","type":"post","link":"https:\/\/e.americanpro.org\/?p=1210","title":{"rendered":"Example &#8211; FIFO Comparison with Multiple Sales: Periodic vs. Perpetual Inventory"},"content":{"rendered":"<h3 data-start=\"261\" data-end=\"297\">\ud83d\udd30 Beginning Inventory (May 31):<\/h3>\n<ul data-start=\"298\" data-end=\"328\">\n<li data-start=\"298\" data-end=\"328\">\n<p data-start=\"300\" data-end=\"328\">100 units @ $10 = <strong data-start=\"318\" data-end=\"328\">$1,000<\/strong><\/p>\n<\/li>\n<\/ul>\n<hr data-start=\"330\" data-end=\"333\" \/>\n<h3 data-start=\"335\" data-end=\"352\">\ud83d\udce6 Purchases:<\/h3>\n<div class=\"_tableContainer_80l1q_1\">\n<div class=\"_tableWrapper_80l1q_14 group flex w-fit flex-col-reverse\" tabindex=\"-1\">\n<table class=\"w-fit min-w-(--thread-content-width)\" data-start=\"354\" data-end=\"553\">\n<thead data-start=\"354\" data-end=\"403\">\n<tr data-start=\"354\" data-end=\"403\">\n<th data-start=\"354\" data-end=\"366\" data-col-size=\"sm\">Date<\/th>\n<th data-start=\"366\" data-end=\"377\" data-col-size=\"sm\">Quantity<\/th>\n<th data-start=\"377\" data-end=\"389\" data-col-size=\"sm\">Unit Cost<\/th>\n<th data-start=\"389\" data-end=\"403\" data-col-size=\"sm\">Total Cost<\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"454\" data-end=\"553\">\n<tr data-start=\"454\" data-end=\"503\">\n<td data-start=\"454\" data-end=\"466\" data-col-size=\"sm\">June 5<\/td>\n<td data-col-size=\"sm\" data-start=\"466\" data-end=\"477\">200<\/td>\n<td data-col-size=\"sm\" data-start=\"477\" data-end=\"489\">$11<\/td>\n<td data-col-size=\"sm\" data-start=\"489\" data-end=\"503\">$2,200<\/td>\n<\/tr>\n<tr data-start=\"504\" data-end=\"553\">\n<td data-start=\"504\" data-end=\"516\" data-col-size=\"sm\">June 20<\/td>\n<td data-col-size=\"sm\" data-start=\"516\" data-end=\"527\">150<\/td>\n<td data-col-size=\"sm\" data-start=\"527\" data-end=\"539\">$12<\/td>\n<td data-col-size=\"sm\" data-start=\"539\" data-end=\"553\">$1,800<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<div class=\"sticky end-(--thread-content-margin) h-0 self-end select-none\">\n<div class=\"absolute end-0 flex items-end\"><\/div>\n<\/div>\n<\/div>\n<\/div>\n<hr data-start=\"555\" data-end=\"558\" \/>\n<h3 data-start=\"560\" data-end=\"573\">\ud83d\udcb5 Sales:<\/h3>\n<div class=\"_tableContainer_80l1q_1\">\n<div class=\"_tableWrapper_80l1q_14 group flex w-fit flex-col-reverse\" tabindex=\"-1\">\n<table class=\"w-fit min-w-(--thread-content-width)\" data-start=\"575\" data-end=\"694\">\n<thead data-start=\"575\" data-end=\"604\">\n<tr data-start=\"575\" data-end=\"604\">\n<th data-start=\"575\" data-end=\"587\" data-col-size=\"sm\">Date<\/th>\n<th data-start=\"587\" data-end=\"604\" data-col-size=\"sm\">Quantity Sold<\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"635\" data-end=\"694\">\n<tr data-start=\"635\" data-end=\"664\">\n<td data-start=\"635\" data-end=\"647\" data-col-size=\"sm\">June 10<\/td>\n<td data-col-size=\"sm\" data-start=\"647\" data-end=\"664\">150 units<\/td>\n<\/tr>\n<tr data-start=\"665\" data-end=\"694\">\n<td data-start=\"665\" data-end=\"677\" data-col-size=\"sm\">June 25<\/td>\n<td data-col-size=\"sm\" data-start=\"677\" data-end=\"694\">200 units<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<div class=\"sticky end-(--thread-content-margin) h-0 self-end select-none\">\n<div class=\"absolute end-0 flex items-end\"><\/div>\n<\/div>\n<\/div>\n<\/div>\n<hr data-start=\"696\" data-end=\"699\" \/>\n<h3 data-start=\"701\" data-end=\"740\">\ud83d\udce6 Physical Inventory on June 30:<\/h3>\n<ul data-start=\"741\" data-end=\"756\">\n<li data-start=\"741\" data-end=\"756\">\n<p data-start=\"743\" data-end=\"756\"><strong data-start=\"743\" data-end=\"756\">100 units<\/strong><\/p>\n<\/li>\n<\/ul>\n<hr data-start=\"758\" data-end=\"761\" \/>\n<h3 data-start=\"763\" data-end=\"798\">\u2795 Total Available Before Sales:<\/h3>\n<div class=\"_tableContainer_80l1q_1\">\n<div class=\"_tableWrapper_80l1q_14 group flex w-fit flex-col-reverse\" tabindex=\"-1\">\n<table class=\"w-fit min-w-(--thread-content-width)\" data-start=\"799\" data-end=\"1121\">\n<thead data-start=\"799\" data-end=\"851\">\n<tr data-start=\"799\" data-end=\"851\">\n<th data-start=\"799\" data-end=\"812\" data-col-size=\"sm\">Date<\/th>\n<th data-start=\"812\" data-end=\"820\" data-col-size=\"sm\">Units<\/th>\n<th data-start=\"820\" data-end=\"836\" data-col-size=\"sm\">Cost per Unit<\/th>\n<th data-start=\"836\" data-end=\"851\" data-col-size=\"sm\">Total Value<\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"906\" data-end=\"1121\">\n<tr data-start=\"906\" data-end=\"959\">\n<td data-start=\"906\" data-end=\"919\" data-col-size=\"sm\">May 31<\/td>\n<td data-col-size=\"sm\" data-start=\"919\" data-end=\"927\">100<\/td>\n<td data-col-size=\"sm\" data-start=\"927\" data-end=\"944\">$10<\/td>\n<td data-col-size=\"sm\" data-start=\"944\" data-end=\"959\">$1,000<\/td>\n<\/tr>\n<tr data-start=\"960\" data-end=\"1013\">\n<td data-start=\"960\" data-end=\"973\" data-col-size=\"sm\">June 5<\/td>\n<td data-col-size=\"sm\" data-start=\"973\" data-end=\"981\">200<\/td>\n<td data-col-size=\"sm\" data-start=\"981\" data-end=\"998\">$11<\/td>\n<td data-col-size=\"sm\" data-start=\"998\" data-end=\"1013\">$2,200<\/td>\n<\/tr>\n<tr data-start=\"1014\" data-end=\"1067\">\n<td data-start=\"1014\" data-end=\"1027\" data-col-size=\"sm\">June 20<\/td>\n<td data-col-size=\"sm\" data-start=\"1027\" data-end=\"1035\">150<\/td>\n<td data-col-size=\"sm\" data-start=\"1035\" data-end=\"1052\">$12<\/td>\n<td data-col-size=\"sm\" data-start=\"1052\" data-end=\"1067\">$1,800<\/td>\n<\/tr>\n<tr data-start=\"1068\" data-end=\"1121\">\n<td data-start=\"1068\" data-end=\"1081\" data-col-size=\"sm\"><strong data-start=\"1070\" data-end=\"1079\">Total<\/strong><\/td>\n<td data-col-size=\"sm\" data-start=\"1081\" data-end=\"1089\">450<\/td>\n<td data-col-size=\"sm\" data-start=\"1089\" data-end=\"1106\"><\/td>\n<td data-col-size=\"sm\" data-start=\"1106\" data-end=\"1121\"><strong data-start=\"1108\" data-end=\"1118\">$5,000<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<div class=\"sticky end-(--thread-content-margin) h-0 self-end select-none\">\n<div class=\"absolute end-0 flex items-end\"><\/div>\n<\/div>\n<\/div>\n<\/div>\n<hr data-start=\"1123\" data-end=\"1126\" \/>\n<h2 data-start=\"1128\" data-end=\"1170\">\ud83d\udcd8 A. FIFO Under <strong data-start=\"1148\" data-end=\"1170\">Periodic Inventory<\/strong><\/h2>\n<p data-start=\"1172\" data-end=\"1254\">FIFO assumes <strong data-start=\"1185\" data-end=\"1212\">oldest costs sold first<\/strong>, but applies this <strong data-start=\"1231\" data-end=\"1253\">only at period-end<\/strong>.<\/p>\n<p data-start=\"1256\" data-end=\"1370\"><strong data-start=\"1256\" data-end=\"1306\">Total sold during June = 150 + 200 = 350 units<\/strong><br data-start=\"1306\" data-end=\"1309\" \/><strong data-start=\"1309\" data-end=\"1370\">Ending Inventory = 100 units (from most recent purchases)<\/strong><\/p>\n<h3 data-start=\"1372\" data-end=\"1423\">\ud83d\udd22 Step 1: Ending Inventory (from newest costs)<\/h3>\n<p data-start=\"1425\" data-end=\"1463\">To assign cost to 100 remaining units:<\/p>\n<ul data-start=\"1464\" data-end=\"1507\">\n<li data-start=\"1464\" data-end=\"1507\">\n<p data-start=\"1466\" data-end=\"1507\">100 units from <strong data-start=\"1481\" data-end=\"1492\">June 20<\/strong> @ $12 = $1,200<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"1509\" data-end=\"1540\">\u2705 <strong data-start=\"1511\" data-end=\"1540\">Ending Inventory = $1,200<\/strong><\/p>\n<hr data-start=\"1542\" data-end=\"1545\" \/>\n<h3 data-start=\"1547\" data-end=\"1566\">\ud83d\udd22 Step 2: COGS<\/h3>\n<p data-start=\"1568\" data-end=\"1648\">COGS = Total Goods Available \u2013 Ending Inventory<br data-start=\"1615\" data-end=\"1618\" \/>= $5,000 \u2013 $1,200 = <strong data-start=\"1638\" data-end=\"1648\">$3,800<\/strong><\/p>\n<hr data-start=\"1650\" data-end=\"1653\" \/>\n<h2 data-start=\"1655\" data-end=\"1698\">\ud83d\udcd7 B. FIFO Under <strong data-start=\"1675\" data-end=\"1698\">Perpetual Inventory<\/strong><\/h2>\n<p data-start=\"1700\" data-end=\"1793\">Here, inventory and COGS are updated <strong data-start=\"1737\" data-end=\"1756\">after each sale<\/strong>, using FIFO at the <strong data-start=\"1776\" data-end=\"1792\">time of sale<\/strong>.<\/p>\n<hr data-start=\"1795\" data-end=\"1798\" \/>\n<h3 data-start=\"1800\" data-end=\"1826\">\ud83d\udccd Before June 10 Sale<\/h3>\n<p data-start=\"1828\" data-end=\"1838\">Inventory:<\/p>\n<ul data-start=\"1839\" data-end=\"1913\">\n<li data-start=\"1839\" data-end=\"1861\">\n<p data-start=\"1841\" data-end=\"1861\">100 @ $10 = $1,000<\/p>\n<\/li>\n<li data-start=\"1862\" data-end=\"1913\">\n<p data-start=\"1864\" data-end=\"1913\">200 @ $11 = $2,200<br data-start=\"1882\" data-end=\"1885\" \/><strong data-start=\"1885\" data-end=\"1913\">Total: 300 units, $3,200<\/strong><\/p>\n<\/li>\n<\/ul>\n<hr data-start=\"1915\" data-end=\"1918\" \/>\n<h3 data-start=\"1920\" data-end=\"1950\">\ud83d\udccd June 10: Sold 150 units<\/h3>\n<p data-start=\"1952\" data-end=\"1976\">Sold using oldest costs:<\/p>\n<ul data-start=\"1977\" data-end=\"2037\">\n<li data-start=\"1977\" data-end=\"1999\">\n<p data-start=\"1979\" data-end=\"1999\">100 @ $10 = $1,000<\/p>\n<\/li>\n<li data-start=\"2000\" data-end=\"2037\">\n<p data-start=\"2002\" data-end=\"2037\">50 @ $11 = $550<br data-start=\"2017\" data-end=\"2020\" \/><strong data-start=\"2020\" data-end=\"2037\">COGS = $1,550<\/strong><\/p>\n<\/li>\n<\/ul>\n<p data-start=\"2039\" data-end=\"2059\">Remaining inventory:<\/p>\n<ul data-start=\"2060\" data-end=\"2080\">\n<li data-start=\"2060\" data-end=\"2080\">\n<p data-start=\"2062\" data-end=\"2080\">150 @ $11 = $1,650<\/p>\n<\/li>\n<\/ul>\n<hr data-start=\"2082\" data-end=\"2085\" \/>\n<h3 data-start=\"2087\" data-end=\"2110\">\ud83d\udccd June 20 Purchase<\/h3>\n<ul data-start=\"2112\" data-end=\"2138\">\n<li data-start=\"2112\" data-end=\"2138\">\n<p data-start=\"2114\" data-end=\"2138\">150 units @ $12 = $1,800<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"2140\" data-end=\"2154\">Inventory now:<\/p>\n<ul data-start=\"2155\" data-end=\"2229\">\n<li data-start=\"2155\" data-end=\"2177\">\n<p data-start=\"2157\" data-end=\"2177\">150 @ $11 = $1,650<\/p>\n<\/li>\n<li data-start=\"2178\" data-end=\"2229\">\n<p data-start=\"2180\" data-end=\"2229\">150 @ $12 = $1,800<br data-start=\"2198\" data-end=\"2201\" \/><strong data-start=\"2201\" data-end=\"2229\">Total: 300 units, $3,450<\/strong><\/p>\n<\/li>\n<\/ul>\n<hr data-start=\"2231\" data-end=\"2234\" \/>\n<h3 data-start=\"2236\" data-end=\"2266\">\ud83d\udccd June 25: Sold 200 units<\/h3>\n<p data-start=\"2268\" data-end=\"2279\">FIFO pulls:<\/p>\n<ul data-start=\"2280\" data-end=\"2340\">\n<li data-start=\"2280\" data-end=\"2302\">\n<p data-start=\"2282\" data-end=\"2302\">150 @ $11 = $1,650<\/p>\n<\/li>\n<li data-start=\"2303\" data-end=\"2340\">\n<p data-start=\"2305\" data-end=\"2340\">50 @ $12 = $600<br data-start=\"2320\" data-end=\"2323\" \/><strong data-start=\"2323\" data-end=\"2340\">COGS = $2,250<\/strong><\/p>\n<\/li>\n<\/ul>\n<p data-start=\"2342\" data-end=\"2362\">Remaining inventory:<\/p>\n<ul data-start=\"2363\" data-end=\"2383\">\n<li data-start=\"2363\" data-end=\"2383\">\n<p data-start=\"2365\" data-end=\"2383\">100 @ $12 = $1,200<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"2385\" data-end=\"2478\">\u2705 Ending Inventory = $1,200<br data-start=\"2412\" data-end=\"2415\" \/>\u2705 Total COGS = $1,550 (June 10) + $2,250 (June 25) = <strong data-start=\"2468\" data-end=\"2478\">$3,800<\/strong><\/p>\n<hr data-start=\"2480\" data-end=\"2483\" \/>\n<h2 data-start=\"2485\" data-end=\"2506\">\u2705 Final Comparison<\/h2>\n<div class=\"_tableContainer_80l1q_1\">\n<div class=\"_tableWrapper_80l1q_14 group flex w-fit flex-col-reverse\" tabindex=\"-1\">\n<table class=\"w-fit min-w-(--thread-content-width)\" data-start=\"2508\" data-end=\"2771\">\n<thead data-start=\"2508\" data-end=\"2572\">\n<tr data-start=\"2508\" data-end=\"2572\">\n<th data-start=\"2508\" data-end=\"2530\" data-col-size=\"sm\"><\/th>\n<th data-start=\"2530\" data-end=\"2550\" data-col-size=\"sm\"><strong data-start=\"2532\" data-end=\"2549\">Periodic FIFO<\/strong><\/th>\n<th data-start=\"2550\" data-end=\"2572\" data-col-size=\"sm\"><strong data-start=\"2552\" data-end=\"2570\">Perpetual FIFO<\/strong><\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"2639\" data-end=\"2771\">\n<tr data-start=\"2639\" data-end=\"2705\">\n<td data-start=\"2639\" data-end=\"2662\" data-col-size=\"sm\">Ending Inventory<\/td>\n<td data-col-size=\"sm\" data-start=\"2662\" data-end=\"2682\">$1,200<\/td>\n<td data-col-size=\"sm\" data-start=\"2682\" data-end=\"2705\">$1,200<\/td>\n<\/tr>\n<tr data-start=\"2706\" data-end=\"2771\">\n<td data-start=\"2706\" data-end=\"2728\" data-col-size=\"sm\">COGS<\/td>\n<td data-col-size=\"sm\" data-start=\"2728\" data-end=\"2748\">$3,800<\/td>\n<td data-col-size=\"sm\" data-start=\"2748\" data-end=\"2771\">$3,800<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<h2 data-start=\"2778\" data-end=\"2809\">They Match!<\/h2>\n<p data-start=\"2811\" data-end=\"2923\">Yes \u2014 in this <strong data-start=\"2825\" data-end=\"2846\">specific scenario<\/strong>, even though sales were spread out, FIFO gave <strong data-start=\"2893\" data-end=\"2914\">identical results.<\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>\ud83d\udd30 Beginning Inventory (May 31): 100 units @ $10 = $1,000 \ud83d\udce6 Purchases: Date Quantity Unit Cost Total Cost June 5 200 $11 $2,200 June 20 150 $12 $1,800 \ud83d\udcb5 Sales: Date Quantity Sold June 10 150 units June 25 200 units \ud83d\udce6 Physical Inventory on June 30: 100 units \u2795 Total Available Before Sales: [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":1010,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[36],"tags":[],"class_list":["post-1210","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial-accounting"],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/e.americanpro.org\/wp-content\/uploads\/2021\/03\/2.avif","_links":{"self":[{"href":"https:\/\/e.americanpro.org\/index.php?rest_route=\/wp\/v2\/posts\/1210","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/e.americanpro.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/e.americanpro.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/e.americanpro.org\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/e.americanpro.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1210"}],"version-history":[{"count":0,"href":"https:\/\/e.americanpro.org\/index.php?rest_route=\/wp\/v2\/posts\/1210\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/e.americanpro.org\/index.php?rest_route=\/wp\/v2\/media\/1010"}],"wp:attachment":[{"href":"https:\/\/e.americanpro.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1210"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/e.americanpro.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1210"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/e.americanpro.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1210"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}