Perpetual Inventory UsingFIFO

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

Apr. 1Inventory72 units @ $7210Sale49 units15Purchase36 units @ $7620Sale30 units24Sale16 units30Purchase38 units @ $79

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 inExhibit 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 ScheduleFirst-in, First-out MethodPortable DVD PlayersDateQuantity PurchasedPurchases Unit CostPurchases Total CostQuantity Cost of Merchandise SoldCost of Merchandise Sold Unit CostCost of Merchandise Sold Total CostInventory QuantityInventory Unit CostInventory Total CostApr. 1$$Apr. 10$$Apr. 15$$Apr. 20Apr. 24Apr. 30Apr. 30Balances$$

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