Question

Perpetual Inventory Using FIFO

Beginning inventory, purchases, and sales for Item ER27 are as follows:

July 1		Inventory	64 units @ $24
9		Sale	42 units
13		Purchase	72 units @ $25
28		Sale	30 units

Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine (a) the cost of merchandise sold on July 28 and (b) the inventory on July 31.

a. Cost of merchandise sold on July 28	$
b. Inventory on July 31	$

Answer 1

FIFO Method
		Units Acquired			Cost of Goods Sold			Ending Balance
Date	Activities	Units Acquired	$ per unit	Total Amount	Units Sold	$ per unit	Total Amount	Units on Hand	$ per unit	Total Amount
Jul-01	Inventory	64	$24	$1,536				64	$24	$1,536
Jul-09	Sale				42	$24	$1,008	22	$24	$528
Jul-13	Purchase	72	$25	$1,800				22	$24	$528
								72	$25	$1,800
Jul-28	Sale				22	$24	$528	64	$25	$1,600
					8	$25	$200
		Cost of Goods Sold			72		$1,736
		Inventory on July -31						64	$25	$1,600

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