Question

1. Perpetual Inventory Using FIFO

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

   November 1		Inventory	120 units at $39
   10		Sale	90 units
   15		Purchase	140 units at $40
   20		Sale	110 units
   24		Sale	45 units
   30		Purchase	160 units at $43

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

   a. Determine the cost of goods sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 3. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Goods Sold Unit Cost column and in the Inventory Unit Cost column.

   Cost of Goods Sold Schedule
   First-in, First-out Method
   DVD Players
   Date	Quantity Purchased	Purchases Unit Cost	Purchases Total Cost	Quantity Sold	Cost of Goods Sold Unit Cost	Cost of Goods Sold Total Cost	Inventory Quantity	Inventory Unit Cost	Inventory Total Cost
   Nov. 1
   Nov. 10
   Nov. 15
   Nov. 20
   Nov. 24
   Nov. 30
   Nov. 30	Balances

   b. Based upon the preceding data, would you expect the inventory to be higher or lower using the last-in, first-out method?
   

Answer 1

Answer

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