Tetra Co. uses the perpetual inventory system and a FIFO cost flow method. On January 1, the company purchased 2,000 units of inventory that cost $4.00 each. On January 12, the company purchased an additional 3,000 units of inventory at a cost of $4.20 each. On January 20, Tetra Company sold 4,000 units of inventory. Which of the following entries would be required to recognize the cost of goods sold on that date?
A.
| Cost of goods sold | 16,400 | |
| Inventory | 16,400 |
B.
| Inventory | 16,600 | |
| Cost of goods sold | 16,600 |
C.
| Cost of goods sold | 16,600 | |
| Inventory | 16,600 |
D.
| Inventory | 16,400 | |
| Cost of goods sold | 16,400 |
Answer: A
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