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Worked-example setupScope and assumptions
- Cedar Trail is fictional, and all rights, cutoff, qualifying costs, dates, and removals are supplied for calculation practice.
- Serial records for the two kayaks are complete and unchanged from acquisition through sale or count.
- Filters are interchangeable; FIFO assigns their costs and does not describe their physical movement.
- Period
- One inventory period
- Units
- Inventory units and US dollars
- Rounding
- Display dollars to cents
Separate actual unit tracing from a cost assumption
Cedar owns two custom kayaks. Acquisition records tie serial K-41 to a $3,200 qualifying cost and K-42 to a $3,450 qualifying cost. The sales record and shipping evidence identify K-41 as sold. The controlled count identifies K-42 as the unit on hand. Specific identification therefore assigns $3,200 to the sold kayak and leaves $3,450 in inventory. Each serial number appears once, and the trace does not depend on a desired income result.
Cedar also sells interchangeable water filters. A barcode identifies the product but does not preserve each filter's actual acquisition cost. Cedar uses FIFO for that pool.
Build the dated FIFO schedule
Cedar begins with 40 filters at $18, buys 30 at $20, sells 50, buys 25 at $22, and sells 20.
| Event | FIFO cost assigned | Layers after the event |
|---|---|---|
| Opening | — | 40 at $18 |
| Buy 30 | — | 40 at $18; 30 at $20 |
| Sell 50 | 40 × $18 + 10 × $20 = $920 | 20 at $20 |
| Buy 25 | — | 20 at $20; 25 at $22 |
| Sell 20 | 20 × $20 = $400 | 25 at $22 |
Perpetual FIFO cost of goods sold is $1,320, and ending inventory is $550. Periodic FIFO reaches the same result by assigning the 70 units sold to the earliest costs in all 95 available units.
Reconcile quantity and cost
Units reconcile as 40 + 30 + 25 − 50 − 20 = 25. Cost reconciles as `$1,320
- $550 = $1,870`. These checks support the arithmetic under the supplied facts. They do not prove rights, cost eligibility, method selection, or which physical filter shipped.
Next, complete the independent Northstar specific-identification and FIFO practice. The US-GAAP cost-flow boundary appears in ASC 330-10-30-9.
Verified calculation · inventory cost flow analysis
The curriculum loader recomputed this example before it entered the site build. Expand any structured input to inspect the stated facts.
- events
- 4 items
Inspect data
[
{
"kind": "purchase",
"unit_cost": 20,
"units": 30
},
{
"kind": "sale",
"unit_cost": null,
"units": 50
},
{
"kind": "purchase",
"unit_cost": 22,
"units": 25
},
{
"kind": "sale",
"unit_cost": null,
"units": 20
}
]- opening layers
- 1 field
Inspect data
{
"opening_filters": {
"unit_cost": 18,
"units": 40
}
}Recomputed result
| Measure | Value |
|---|---|
| ending units | 25 |
| goods available cost | 1,870 |
| goods available units | 95 |
| periodic fifo cost of goods sold | 1,320 |
| periodic fifo ending inventory | 550 |
| perpetual fifo cost of goods sold | 1,320 |
| perpetual fifo ending inventory | 550 |
| units sold | 70 |