Question

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

Apr. 1		Inventory	41 units @ $77
10		Sale	28 units
15		Purchase	17 units @ $80
20		Sale	18 units
24		Sale	8 units
30		Purchase	27 units @ $84

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.

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Answer 1

Requirement Date 41 FIFO Method Perpetual Inventory Record Purchases Cost of Goods Sold Inventory Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost 1-Apr $77.00 $3,157.00 10-Apr 28 $77.00 $2,156.00 13 $77.00 $1,001.00 15-Apr 17 $80.00 $1,360.00 13 $77.00 $1,001.00 17 $80.00 $1,360.00 20-Apr 13 $77.00 $1,001.00 5 $80.00 $400.00 $80.00 $960.00 24-Apr 8 $80.00 $640.00 $80.00 $320.00 30-Apr 27 $84.00 $2,268.00 4 $80.00 $320.00 27 $84.00 $2,268.00 Cost of Goods Sold on 10 Apr $2,156.00 Inventory Balance on 10 Apr Quantity Unit Cost Total Cost 13 $77.00 $1,001.00 Cost of Goods Sold on 20 Apr $1,401.00 (1001+400) Inventory Balance on 20 Apr Quantity Unit Cost Total Cost 12 S80.00 $960.00 Cost of Goods Sold on 24 Apr S640.00 Inventory Balance on 24 Apr Quantity Unit Cost Total Cost 4 $80.00 $320.00