Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales for Item B901 are as follows: July 1 Inventory 71 units @ $24 9 Sale 47 units 13 Purchase 84 units @ $28 25 Sale 32 units Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine (a) the cost of merchandise sold on July 25 and (b) the inventory on July 31. a. Cost of merchandise sold on July 25 564 x b. Inventory on July 31 Feedback Check My Work a. When the FIFO method is used, costs are included in cost of merchandise sold in the order in which they were purchased. Think of your inventory in terms of "layers." Determine how much inventory remains from each layer after each sale. b. The ending inventory is made up of the most recent purchases