Question

Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales data for portable DVD players are as follows: Apr. 1 Inventory S7 units @ $95 10 Sale 40 units Purchase 29 units $101 Sale 22 units Sale 11 units 30 Purchase 27 units $105 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 eac 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. Cost of the Merchandise Sold Schedule First-In, First-out Method Portable DVD Players Quantity Purchases Purchases Quantity Cost of Cost of Merchandise Cost of Merchandise Inventory Inventory Inventory ware Purchased Unit Cost Total Cost Merchandise Sold Sold Unit Cost Sold Total Cost Quantity Unit Cost Total Cost Apr 10 Previous Next >

Answer 1

Requirement (A) Cost of Goods sold Schedule First in First Out Method DVD Players Date Quantity Purchases Purchases Purchases unit cost Total cost 01-Apr Quantity sold Cost of goods sold unit cost cost of goods sold Total cost Inventory Inventory Inventory Quantity unit cost total cost 57 $ 95.00 $5,415.00 10-Apr 40 $ 95.00 $ 3,800.00 17 $ 95.00 $ 1,615.00 15-Apr 29 $ 101.00 $2,929.00 17 $ 95.00 29 $ 101.00 $ 1,615.00 $2,929.00 20-Apr 17 5 $ $ 95.00 101.00 $ $ 1,615.00 505.00 0 $ 95.00 24 $ 101.00 $ $2,424.00 24-Apr 11 $ 101.00 $ 1,111.00 13 $ 101.00 $ 1,313.00 30-Apr 27 $ 105.00 $2,835.00 13 $ 101.00 27 $ 105.00 $ 1,313.00 $2,835.00 Apr 30 Balances 7,031.00 $ 4,148.00 Requirement (B) Based Upon the Preceeding data , would you expect inventory to be higher or lower using last in firstout method ? Ending inventory will be lower Because, Lifo method assumes that goods purchased last will be sold so in above case the beginning inventory units will be there in ending inventory