Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales data fo
ID: 2560420 • Letter: P
Question
Perpetual Inventory Using 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.
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.
Apr. 1 Inventory 66 units @ $90 10 Sale 44 units 15 Purchase 32 units @ $95 20 Sale 30 units 24 Sale 10 units 30 Purchase 37 units @ $99 Cost of the Merchandise Sold Schedule i.alake bh'krgraes Quantity Prchases Unit Purchases Total Quantity Cost of Merchandise Sold Cost of Merchandise Sold Inventory Inventory Unit Inventory Total Date Apr. Apr Cost Cost Sold Unit Cost Total Cost Quantity Cost Cost 15 Apr. 20 24 30 Apr Balances b. Based upon the preceding data, would you expect the inventory to be higher or lower using the last-in, first-out method?Explanation / Answer
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.
22
32
90
95
1980
3040
22
8
90
95
1980
760
14
37
95
99
1330
3663
b) Inventory would be lower using the Last in first out method.
Date quantity purchase unit cost purchase cost quantity sold unit cost cost of goods sold inventory on hand unit cost Inventory cost apr 1 66 90 5940 apr 10 44 90 3960 22 90 1980 apr 15 32 95 304022
32
90
95
1980
3040
apr 2022
8
90
95
1980
760
24 95 2280 apr 24 10 95 950 14 95 1330 apr 30 37 99 366314
37
95
99
1330
3663
Apr 30 7650 4993Related Questions
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