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

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.

November 1 Inventory 64 units at $48 10 Sale 51 units 15 Purchase 36 units at $50 20 Sale 21 units 24 Sale 18 units 30 Purchase 32 units at $53 Date Quantity Purchased Purchases Unit Cost Puchases Total Cost Quantity Sold Cost of Goods Sold Unit Cost Cost of Goods Sold Total Cost Inventory Quantity Inventory Unit Cost Inventory Total Cost Nov. 1 Nov. 10 Nov. 15 Nov. 20 Nov. 24 Nov. 30 Nov. 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?

Explanation / Answer

STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL FIFO METHOD RECIEPTS COST OF GOODS SOLD BALANCE DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ 1-Nov 64 48 3072 10-Nov 51 48 2448 13 48 624 15-Nov 36 50 1800 13 48 624 36 50 1800 20-Nov 13 48 624 8 50 400 28 50 1400 24-Nov 18 50 900 10 50 500 30-Nov 32 53 1696 10 50 500 32 53 1696 TOTAL 68 3496 90 4372 42 2196 Req A: Cost of Goods sold under FIFO: $ 4372 Req B: LOWER, Inventory will be lower using LIFO. As the prices are rising, the Inventory under LIFO will remain from previous low prices.

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.