Question

Perpetual Inventory Using FIFO

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

June 1		Inventory	64 units @ $85
6		Sale	43 units
14		Purchase	32 units @ $88
19		Sale	28 units
25		Sale	20 units
30		Purchase	30 units @ $92

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 4.

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
June 1							64	$85	$5440
June 6					$	$
June 14		$	$
June 19
June 25
June 30
June 30	Balances					$			$

Answer 1

Cost of the Merchandise Sold Schedule
First-in, First-out Method
Portable DVD Players
Date	Quantity purchase	Purchase unit cost	Purchase total cost	Quantity sold	Cost of merchandise sold unit cost	Cost of merchandise sold total cost	Inventory quantity	Inventory unit cost	Inventory total cost
June 1							64	85	5440
June 6				43	85	3655	21	85	1785
June 14	32	88	2816				21 32	85 88	1785 2816
June 19				21 7	85 88	1785 616	25	88	2200
June 25				20	88	1760	5	88	440
June 30	30	92	2760				5 30	88 92	440 2760
June 30	Balances					7816			3200