Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales data fo

Question

Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales data for portable DVD players are as follows: Apr. 1 10 15 20 24 30 Inventory Sale Purchase Sale Sale Purchase 74 units @ $87 54 units 31 units @ $91 29 units 15 units 27 units @ $95 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

Explanation / Answer

1)FIFO

2)under LIFO units acquired last are sold first so ending inventory are left from initial purchase balance .since the price is showing increasing trends so ending inventory will be left from lower cost

ending inventory will be lower

Date quanity purchased purchase unit cost Purchase total cost quantity sold unit cost cost of merchandise sold Inventory quantity Inventory unit cost inventory total cost Apr 1 74 87 6438 Apr 10 54 87 4698 74-54=20 87 1740 Apr 15 31 91 2821 20 87 1740 31 91 2821 Apr 20 20 87 1740 31-9= 22 91 2002 29-20=9 91 819 Apr 24 15 91 1365 22-15=7 91 637 Apr 30 27 95 2565 7 91 637 27 95 2565 Apr 30 8622 637+2565=3202

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