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 66 units @ \$63 10 Sale 43 units 15 Purchase 30 units @ \$66 20 Sale 31 units 24 Sale 11 units 30 Purchase 39 units @ \$69

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?

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 66 63 4158 Apr 10 43 63 2709 23 63 1449 Apr 15 30 66 1980 23 30 63 66 1449 1980 Apr 20 23 8 63 66 1449 528 22 66 1452 Apr 24 11 66 726 11 66 726 Apr 30 39 69 2691 11 39 66 69 726 2691 Apr 30 Balances 5412 3417

b) Inventory will be lower under last in first out method