Perpetual inventory using FIFO Beginning inventory, purchases, and sales data for DVD players are as follows Date Line Item Description Units and Cost Nov 1 Inventory 54 units at $57 10 Sale 38 units 15 Purchase 26 units at $60 20 Sale 21 units 24 Sale 13 units 30 Purchase 40 units at $64 The business maintains a perpetual inventory system, costing by the first in, first out method Question Content Area a Determine the cost of 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 Date Quantity Purchased Purchases Unit Cost Purchases 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 1 Nov 1 Nov 1 Nov 10 Nov 10 Nov 10 Nov 10 Nov 10 Nov 10 Nov 10 Nov 15 Nov 15 Nov 15 Nov 15 Nov 15 Nov 15 Nov 15 fill in the blank 65090ff83046ff8 16 fill in the blank 65090ff83046ff8 17 fill in the blank 65090ff83046ff8 18 Nov 20 Nov 20 Nov 20 Nov 20 Nov 20 Nov 20 Nov 20 fill in the blank 65090ff83046ff8 25 fill in the blank 65090ff83046ff8 26 fill in the blank 65090ff83046ff8 27 Nov 24 Nov 24 Nov 24 Nov 24 Nov 24 Nov 24 Nov 24 Nov 30 Nov 30 Nov 30 Nov 30 Nov 30 Nov 30 Nov 30 fill in the blank 65090ff83046ff8 40 fill in the blank 65090ff83046ff8 41 fill in the blank 65090ff83046ff8 42 Nov 30 Balances Nov 30 Nov 30 Feedback Area Feedback 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 Question Content Area b Based upon the preceding data, would you expect the inventory to be higher or lower using the last in, first out method HigherLower Feedback Area Feedback Consider the cost of inventory when purchased and when sold Remember FIFO reports higher gross profit, net income, and ending inventory than the LIFO method when costs (prices) are increasing Feedback Area Feedback Incorrect

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Question: Perpetual inventory using FIFO Beginning inventory, purchases, and sales data for DVD players are as follows: Date Line Item Description Units and Cost Nov. 1

Perpetual inventory using FIFO

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

Date	Line Item Description	Units and Cost
Nov. 1	Inventory	54 units at $57
10	Sale	38 units
15	Purchase	26 units at $60
20	Sale	21 units
24	Sale	13 units
30	Purchase	40 units at $64

The business maintains a perpetual inventory system, costing by the first-in, first-out method.

Question Content Area

a. Determine the cost of 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.

Date	Quantity Purchased	Purchases Unit Cost	Purchases 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. 1	Nov. 1	Nov. 1
Nov. 10				Nov. 10	Nov. 10	Nov. 10	Nov. 10	Nov. 10	Nov. 10
Nov. 15	Nov. 15	Nov. 15	Nov. 15				Nov. 15	Nov. 15	Nov. 15
							fill in the blank 65090ff83046ff8_16	fill in the blank 65090ff83046ff8_17	fill in the blank 65090ff83046ff8_18
Nov. 20				Nov. 20	Nov. 20	Nov. 20	Nov. 20	Nov. 20	Nov. 20
				fill in the blank 65090ff83046ff8_25	fill in the blank 65090ff83046ff8_26	fill in the blank 65090ff83046ff8_27
Nov. 24				Nov. 24	Nov. 24	Nov. 24	Nov. 24	Nov. 24	Nov. 24
Nov. 30	Nov. 30	Nov. 30	Nov. 30				Nov. 30	Nov. 30	Nov. 30
							fill in the blank 65090ff83046ff8_40	fill in the blank 65090ff83046ff8_41	fill in the blank 65090ff83046ff8_42
Nov. 30	Balances					Nov. 30			Nov. 30

Feedback Area

Feedback

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.

Question Content Area

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

HigherLower

Feedback Area

Feedback

Consider the cost of inventory when purchased and when sold. Remember FIFO reports higher gross profit, net income, and ending inventory than the LIFO method when costs (prices) are increasing.

Feedback Area

Feedback

Incorrect

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