Question

Perpetual Inventory Using FIFO

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

Apr. 1		Inventory	45 units @ $69
10		Sale	32 units
15		Purchase	19 units @ $73
20		Sale	21 units
24		Sale	7 units
30		Purchase	26 units @ $76

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

Solution:

E F G H 4 DVD Players Date 1-Apr 10-Apr 15-Apr Schedule of cost of goods sold (FIFO method) Goods Purchased Cost of goods sold Inventory Balance Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost 45 $69.00 $3,105.00 32 $69.00 $2,208.00 13 $69.00 $897.00 19 $73.00 $1,387.00 13) $69.00 $897.00 $73.00 $1,387.00 13 14 15 20-Apr 13 11 $73.00 $803.00 $69.00 $73.00 $897.00 $584.00 81 17 18 24-Apr $73.00 $511.00 $73.00 $292.00 30-Apr 26 $76.00 $1,976.00 4 26 $73.00 $76.00 $292.00 $1,976.00 23 30-Nov balances I 60 $4,200.00 30 $2,268.00 50 51 et238 ) Sheet207 ) Sheet219 ) Sheet208 Sheet209