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First-In, First-Out

First-In, First-Out. The cost of the oldest inventory items are charged to COGS when goods are sold. The cost of the newest inventory items remain in ending inventory. The FIFO method assumes that items are sold in the chronological order of their acquisition. First-In, First-Out.

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First-In, First-Out

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  1. First-In, First-Out • The cost of the oldest inventory items are charged to COGS when goods are sold. • The cost of the newest inventory items remain in ending inventory. The FIFO method assumes that items are sold in the chronological order of their acquisition.

  2. First-In, First-Out Even though the periodic approach and the perpetual approach differ in the timing of adjustments to inventory . . . . . . COGS and Ending Inventory Cost are the same under both approaches.

  3. FIFO - Periodic Example The following schedule shows the mouse pad inventory for Computers, Inc. for September. The physical inventory count at September 30 shows 800mouse pads in ending inventory. Use the periodic FIFO method to determine: (1) Ending inventory cost. (2) Cost of goods sold.

  4. These are the 800 most recently acquired units. FIFO - Periodic Example

  5. FIFO - Periodic Example 750 250 x $5.25 $1,312.50 + $3,120

  6. These are the first 750 units acquired. FIFO - Periodic Example 750

  7. FIFO - Periodic Example 750 750 x $5.25

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