Question

Perpetual Inventory Using FIFO

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

Apr. 1		Inventory	77 units @ $84
10		Sale	55 units
15		Purchase	33 units @ $87
20		Sale	28 units
24		Sale	16 units
30		Purchase	23 units @ $90

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.

Cost of the Merchandise Sold Schedule
First-in, First-out Method
Portable DVD Players
Date	Quantity Purchased	Purchases Unit Cost	Purchases Total Cost	Quantity Cost of Merchandise Sold	Cost of Merchandise Sold Unit Cost	Cost of Merchandise Sold Total Cost	Inventory Quantity	Inventory Unit Cost	Inventory Total Cost
Apr. 1								$	$
Apr. 10					$	$
Apr. 15		$	$
Apr. 20
Apr. 24
Apr. 30
Apr. 30	Balances					$			$

Answer 1

	FIFO	Purchases			Cost of Goods Sold			Inventory on hand
Date	Activity	Units	Unit Price	Amount	Units	Unit Price	Amount	Units	Unit Price	Amount
Apr-01	Beginning Inventory							77	$    84.00	$     6,468
Apr-10	Sales				55	$    84.00	$     4,620	22	$    84.00	$     1,848
Apr-15	Purchase	33	$    87.00	$     2,871				22	$    84.00	$     1,848
								33	$    87.00	$     2,871
Apr-20	Sales				22	$    84.00	$     1,848
					6	$    87.00	$        522	27	$    87.00	$     2,349
Apr-24	Sales				16	$    87.00	$     1,392	11	$    87.00	$        957
Apr-30	Purchase	23	$    90.00	$     2,070				11	$    87.00	$        957
								23	$    90.00	$     2,070
	Total	56		$    4,941	44		$    8,382	34		$    3,027