Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales data fo
ID: 2510554 • Letter: P
Question
Perpetual Inventory Using FIFO
Beginning inventory, purchases, and sales data for DVD players are as follows:
The business maintains a perpetual inventory system, costing by the first-in, first-out method.
a. Determine the cost of the goods sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 3. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Goods Sold Unit Cost column and in the Inventory Unit Cost column.
b. Based upon the preceding data, would you expect the inventory to be higher or lower using the last-in, first-out method?
Explanation / Answer
(a)FIFO METHOD INVENTORY SCHEDULE
Date
Qty Purchased
Unit Cost
Total Cost
Qty Sold
Unit cost
Cost of goods sold
Ending Inv.Qty
Unit Cost
Total Inventory
Nov 1
55
82
4510
Nov 10
45
82
3690
10
82
820
Nov 15
31
87
2697
10
82
820
31
87
2697
Nov 20
10
82
820
27
87
2349
4
87
348
Nov 24
13
87
1131
14
87
1218
Nov 31
24
91
2184
14
87
1218
24
91
2184
TOTAL
5989
3402
Total Cost of goods sold = $5,989
Ending Inventory Balance = $3,402
LIFO METHOD INVENTORY SCHEDULE
Date
Qty Purchased
Unit Cost
Total Cost
Qty Sold
Unit cost
Cost of goods sold
Ending Inv.Qty
Unit Cost
Total Inventory
Nov 1
55
82
4510
Nov 10
45
82
3690
10
82
820
Nov 15
31
87
2697
10
82
820
31
87
2697
Nov 20
14
87
1218
10
82
820
17
87
1479
Nov 24
13
87
1131
10
82
820
4
87
348
Nov 31
24
91
2184
10
82
820
4
87
348
24
91
2184
TOTAL
6039
3352
Total Cost of goods sold = $6,039
Ending Inventory Balance = $3,352
(b)Based upon the given data’s, We are expecting the ending inventory under LIFO method to be lower than the FIFO Method
Ending Inventory under FIFO = $3,402
Ending Inventory under LIFO = $3,352
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ALL THE BEST !!!
Date
Qty Purchased
Unit Cost
Total Cost
Qty Sold
Unit cost
Cost of goods sold
Ending Inv.Qty
Unit Cost
Total Inventory
Nov 1
55
82
4510
Nov 10
45
82
3690
10
82
820
Nov 15
31
87
2697
10
82
820
31
87
2697
Nov 20
10
82
820
27
87
2349
4
87
348
Nov 24
13
87
1131
14
87
1218
Nov 31
24
91
2184
14
87
1218
24
91
2184
TOTAL
5989
3402
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