![]() In this illustration, the last four costs (starting at the end of the period and moving forward) are two units at $149 each and two units at $130 each for a total of $558. The first costs are now in cost of goods sold while the most recent costs remain in the asset account. When using FIFO, the first costs are transferred to cost of goods sold so the cost of the last four bathtubs remain in the inventory T-account. At the end of the period, the accountant must count and then determine the cost of the items held in ending inventory. In a periodic system, the cost of the new purchases is the focus of the record keeping.
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