Check My Work

a$.$ Note that this exercise uses the perpetual inventory system. FIFO means that the first units purchased are assumed to be the first to be sold. Therefore, ending

inventory is made up of the most recent purchases. Think of your inventory in terms of "layers". The first sale comes from the oldest layer $-$ beginning inventory.

Is the remaining amount of the beginning inventory layer enough to satisfy the second sale? If not, the remaining amount of units sold should be taken from the

first purchase layer. Any remainder from the first purchase will then be considered as the oldest goods to be used for the second sale. If the remainder from the

first purchase is not enough to satisfy the third sale, then cost of merchandise sold will come from the second purchase. The remaining units from the second

purchase make up the ending inventory.

b$.$ Note that this exercise uses the perpetual inventory system. When the perpetual inventorys