Question

Perpetual Inventory Using FIFO

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

Apr. 1		Inventory	69 units @ $54
10		Sale	58 units
15		Purchase	34 units @ $56
20		Sale	19 units
24		Sale	11 units
30		Purchase	34 units @ $58

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

Answer

• Requirement ‘a’

Schedule of Cost of Merchandise Sold
FIFO Method
Date	Quantity Purchased	Purchases Unit Cost	Purchases Total Cost	Quantity Sold	Cost of Merchandise Sold Unit Cost	Cost of Merchandise Sold Total Cost	Inventory Quantity	Inventory Unit Cost	Inventory Total Cost
Apr-01							69	$       54.00	$               3,726.00
Apr-10				58	54	$          3,132.00	11	$       54.00	$                  594.00
Apr-15	34	$            56.00	$      1,904.00			$                     -	11	$       54.00	$                  594.00
						$                     -	34	$       56.00	$               1,904.00
Apr-20				11	$       54.00	$             594.00	26	$       56.00	$               1,456.00
				8	$       56.00	$             448.00			$                         -
Apr-24				11	$       56.00	$             616.00	15	$       56.00	$                  840.00
Apr-30	34	$            58.00	$      1,972.00				15	$       56.00	$                  840.00
							34	$       58.00	$               1,972.00
Balance	68		$      3,876.00	88		$          4,790.00	49		$               2,812.00