Perpetual Inventory Using FIFO

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

Apr. 1 Inventory 76 units @ $63

10 Sale 57 units

15 Purchase 40 units @ $66

20 Sale 24 units

24 Sale 24 units

30 Purchase 29 units @ $70

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

Question Content Area

a. 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. 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 ending inventory to be higher or lower using the last-in, first-out method?

HigherLower