### CFA Practice Question

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### CFA Practice Question

SportsTrader began operations on January 1, 2011. It has been using FIFO since then for inventory accounting. The following stock record card for footballs was taken from the records at the end of the year.

• 01/01 Beginning inventory 10 units, at \$20 each, total \$200
• 05/09 30 footballs purchased, at \$22 each, total \$660
• 08/08 15 footballs purchased, at \$25 each, total \$375
• 12/31 Ending inventory: 25 footballs

What is the COGS for the year?

A. \$530
B. \$640
C. \$595

10 x \$20 + 20 x \$22 = \$640

User Comment
ashok1959 why answer is not c?
thud because \$595 is the value of the ending inventory. COGS = beginning + purchases - ending.
teddajr Nice Qns.. Need to be alert.
mirfanrana can anybody explain this answer its not clear to me.why we took 30 number of items because ending inventory is 25.
julescruis The question asks for COGS not inventory valuation. Since FIFO assumes you sell oldest inventory first, COGS is calculated using price of oldest inventory