Question

Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales data for portable DVD players are as...

Perpetual Inventory Using FIFO

Beginning inventory, purchases, and sales data for portable DVD players are as follows:

Apr. 1 Inventory 56 units @ $52
10 Sale 43 units
15 Purchase 24 units @ $55
20 Sale 22 units
24 Sale 11 units
30 Purchase 29 units @ $58

The business maintains a perpetual inventory system, costing by the first-in, first-out method.

Determine the cost of the merchandise sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 3.

a. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Merchandise Sold Unit Cost column and in the Inventory Unit Cost column.

Cost of the Merchandise Sold Schedule
First-in, First-out Method
Portable DVD Players
Date Quantity Purchased Purchases Unit Cost Purchases Total Cost Quantity Sold Cost of Merchandise Sold Unit Cost Cost of Merchandise Sold Total Cost Inventory Quantity Inventory Unit Cost Inventory Total Cost
Apr. 1 $ $
Apr. 10 $ $
Apr. 15 $ $
Apr. 20
Apr. 24
Apr. 30
Apr. 30 Balances $ $

b. Based upon the preceding data, would you expect the inventory to be higher or lower using the last-in, first-out method?

Homework Answers

Answer #1

a) FIFO METHOD

Date Quantity Purchased Unit cost Purchase cost Quantity sold Cost of Merchandise Sold Unit Cost Cost of Merchandise Sold Total Cost Inventory quantity Inventory unit cost nventory Total Cost
Apr 1 56 52 2912
Apr 10 43 52 2236

13

52

676

Apr 15 24 55 1320

13

24

52

55

676

1320

Apr 20

13

9

52

55

676

495

15 55 825
Apr 24 11 55 605

4

55

220

Apr 30 29 58 1682

4

29

55

58

220

1682

Apr 31 Balances 4012 1902

b. Based upon the preceding data, would you expect the inventory to be higher or lower using the last-in, first-out method?

Inventory will be lower if using last in first out method.

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