Perpetual Inventory Using FIFO

Beginning inventory, purchases, and sales data for portable DVD players are as follows:

Apr. 1		Inventory	47 units @ $51
10		Sale	39 units
15		Purchase	27 units @ $53
20		Sale	14 units
24		Sale	12 units
30		Purchase	22 units @ $55

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.

b. Based upon the preceding data, would you expect the inventory to be higher or lower using the last-in, first-out method?

Higher/Lower

10 Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales data for portable DVD players are as follows: Apr. 1 Inventory 47 units @ $51 Sale 39 units Purchase 27 units @ $53 Sale 14 units Sale 12 units 30 Purchase 22 units @ $55 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 Quantity Purchases Unit Purchases Total Quantity Cost of Merchandise Cost of Merchandise Sold Unit Cost of Merchandise Sold Total Date Inventory Inventory Unit Purchased Cost Cost Sold Cost Cost Quantity Cost Apr. 1 Apr. 10 Apr. Inventory Total Cost 15 Apr. 00000 000 QODIO 100 00000 1000 Apr. 24 Apr. 30 Apr. Balances 30 b. Based upon the preceding data, would you expect the inventory to be higher or lower using the last-in, first-out method