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 44 units @ $98
10 Sale 29 units
15 Purchase 21 units @ $103
20 Sale 22 units
24 Sale 9 units
30 Purchase 20 units @ $108

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 Cost of Merchandise 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

1) Statement of cost of merchandise sold

Date Quantity purchase Purchase unit cost Total Purchase Quantity sold Unit cost Cost of goods sold Quantity on hand Unit cost Ending inventory
Apr 1 44 98 4312
Apr 10 29 98 2842 15 98 1470
Apr 15 21 103 2163

15

21

98

103

1470

2163

Apr 20

15

7

98

103

1470

721

14 103 1442
Apr 24 9 103 927 5 103 515
Apr 30 20 108 2160

5

20

103

108

515

2160

Apr 30 Balance 5960 2675

b) Based upon preceding data inventory would be lower under Last in first out method

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