Question

Calculator Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales data for portable DVD players are as follows: Арг. 1 Inventory 77 units $96 Sale 10 60 units 15 Purchase 34 units@ $101 20 Sale 23 units 24 Sale 15 units 30 Purchase 36 units$106 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 dferent 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 Inventory Inventory Total Cost Cost of Merchandise Sold Unit Cost Cost of Merchandise Sold Total Cost Quantity Cost of Merchandise Sold Inventory Purchases Total Cost Quantity Purchased Purchases Quantity Unit Cost Date Unit Cost 7,390 96 77 Арг. 1 60 Aрг. 10 60 Next

Answer 1

Ans.	Cost of Goods Sold Schedule
	First - in, First - out Method
	DVD Players
	Date	Quantity	Purchases	Purchases	Quantity	COGS	COGS	Inventory	Inventory	Inventory
		Purchased	Unit cost	Total cost	Sold	Unit cost	Total cost	Quantity	Unit cost	Total cost
	1-Nov	77	$96.00	$7,392				77	$96.00	$7,392
	10-Nov				60	$41.00	$2,460	17	$96.00	$1,632
	15-Nov	34	$101.00	$3,434				17	$96.00	$1,632
								34	$101.00	$3,434
	20-Nov				17	$96.00	$1,632
					6	$101.00	$606	28	$101.00	$2,828
	24-Nov				15	$101.00	$1,515	13	$101.00	$1,313
	30-Nov	36	$106.00	$3,816				13	$101.00	$1,313
								36	$106.00	$3,816
	Total				Cost of goods sold		$6,213	Cost of Ending inventory		$5,129
	*In FIFO method the units that have purchased first, are released the first one and the ending inventory
	units remain from the last purchases.
Ans. B	Lower
	While using the LIFO method, ending inventory remains from first purchases, and the unit cost of first purchase
	is $96 which is the lowest unit cost, so we can say that the ending inventory from LIFO method will be lower than
	the FIFO method.