Question

Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales data for portable DVD players are as follows: Apr. 1 Inventory 72 units @ $79 10 Sale 60 units Purchase 42 units @ $82 20 Sale 19 units 24 Sale 22 units Purchase 35 units @ $85 The business maintains a perpetual inventory system, costing by the first-in, first-out method. 30 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. Cost of the Merchandise Sold Schedule First-in, First-out Method Portable DVD Players Quantity Cost of Cost of Merchandise Sold Cost of Merchandise Sold Merchandise Sold Unit Cost Total Cost Date Inventory Inventory Unit Inventory Total Quantity Purchased Purchases Unit Cost Purchases Total Cost Apr. Apr. 100001 000 Polli 001 Apr. Balances 30 b. Based upon the preceding data, would you expect the inventory to be higher or lower using the last in, first-out method?

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

1 Answer 2 Cost of the Merchnadise Sold Schduele 4 First in First Out Method Portable DVD Players Quantity cost of cost of cost of Purchases Total Purchases Unit Inventory Inventory total Quantity Inventory unit merchandise merchandise merchandise Purchased Quantity Cost Cost cost cost sold Total cost 6 Date sold sold unit cost 7 Apr. 1 3Apr. 10 Apr. 15 72 79 5688 79 12 60 4740 79 948 42 82 3444 12 79 948 L0 42 82 3444 11 Apr. 20 12. 79 948 35 82 2870 12 7 82 574 13 Apr. 24 1066 22 82 1804 13 82 4 Apr. 30 15 2975 35 85 13 82 1066 35 85 2975 16 Apr. 30 Balances 8066 4041 17 18 Part 2) 19 The correct answer is Lower 20 1 Explanation Activ Go to S 22 Inventory would be lower because the cost of merchandising is increasing, so inventory would be lower under LIFO 4 choot141 choot142 Choot147 Shoot149 Choot140 Shoot14? Choot144 Choot1/45 choot146