Question

Beginning inventory, purchases, and sales data for portable DVD players are as follows: Apr. 1 Inventory Sale 72 units @ $42 53 units 34 units @ $44 Purchase Sale 24 units Sale 21 units Purchase 23 units @ $47 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.

Answer 1

Schedule of cost of merchandise sold

First in First out

Portable DVD Player

Date	quantity purchase	Purchase unit cost	Purchase total Cost	Quantity cost of merchandise sold	Cost of merchandise sold unit cost	Cost of merchandise sold	Inventory quantity	Inventory unit cost	Inventory total Cost
April 1							72	42	3024
Apr 10				53	42	2226	19	42	798
Apr 15	34	44	1496				19 34	42 44	798 1496
Apr 20				19 5	42 44	798 220	29	44	1276
Apr 24				21	44	924	8	44	352
Apr 30	23	47	1081				8 23	44 47	352 1081
Apr 30	Balance					4168			1433

b) Ending inventory will be higher under last in first out method