Perpetual Inventory Using The method of inventory costing based on the assumptio

Question

Perpetual Inventory Using The method of inventory costing based on the assumption that the costs of merchandise sold should be charged against revenue in the order in which the costs were incurred.FIFO

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

The business maintains a perpetual inventory system, costing by the first-in, first-out method.

a. 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 4. 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.

June 1 Inventory 240 units at $78 10 Sale 180 units 15 Purchase 280 units at $80 20 Sale 220 units 24 Sale 90 units 30 Purchase 320 units at $86

Explanation / Answer

STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL FIFO METHOD RECIEPTS COST OF GOODS SOLD BALANCE DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ 1-Jun 240 78 18720 10-Jun 180 78 14040 60 78 4680 15-Jun 280 80 22400 60 78 4680 280 80 22400 20-Jun 60 78 4680 160 80 12800 120 80 9600 24-Jun 90 80 7200 30 80 2400 30-Jun 320 86 27520 30 80 2400 320 86 27520 TOTAL 600 49920 490 38720 350 29920

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