Perpetual Inventory Using FIFOBeginning inventory, purchases, and sales data for portable DVD players are as follows:Apr. 1 Inventory52 units @ $7410 Sale37 units15 Purchase23 units @ $7720 Sale20 units24 Sale12 units30 Purchase35 units @ $81The 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 ScheduleFirst-in, First-out MethodPortable DVD PlayersDateQuantity PurchasedPurchases Unit CostPurchases Total CostQuantity Cost of Merchandise SoldCost of Merchandise Sold Unit CostCost of Merchandise Sold Total CostInventory QuantityInventory Unit CostInventory Total CostApr. 1       $$Apr. 10    $$   Apr. 15 $$                Apr. 20                   Apr. 24         Apr. 30                   Apr. 30Balances    $  $b.  Based upon the preceding data, would you expect the inventory to be higher or lower using the last-in, first-out method?

Question
Asked Sep 30, 2019

Perpetual Inventory Using FIFO

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

Apr. 1   Inventory 52 units @ $74
10   Sale 37 units
15   Purchase 23 units @ $77
20   Sale 20 units
24   Sale 12 units
30   Purchase 35 units @ $81

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         $     $

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

check_circleExpert Solution
Step 1

a. Compute cost of merchandise sold for each sale and inventory balance after each sale as shown below:

В
D
E
F
G
I
K
Cost of merchandise sold
Quantity of
3
Purchases
Inventory
Inventory
Quantity
purchased Unit cost Total cost
merchandise
Unit cost Total cost quantity Unit cost Total cost
$3,848
$1,110
$1,110
4
Date
sold
01-Apr
10-Apr
$74
$74
5
52
$2.738
$74
6
37
15
7
15-Apr
$74
$77
S1,110
$1,771
8
23
$77
s1,771
15
9
23
10 Total
$2,881
20-Apr
$74
$77
$1,110
$385
11
15
$1,386
$77
12
5
18
$1,386
13 Total
24-Apr
14
12
$77
$924
6
$77
$462
15 Total
$462
$2,835
30-Apr
$462
16
35
$81
6
$77
17
35
$81
$2,835
$5,157
18
$3,297
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В D E F G I K Cost of merchandise sold Quantity of 3 Purchases Inventory Inventory Quantity purchased Unit cost Total cost merchandise Unit cost Total cost quantity Unit cost Total cost $3,848 $1,110 $1,110 4 Date sold 01-Apr 10-Apr $74 $74 5 52 $2.738 $74 6 37 15 7 15-Apr $74 $77 S1,110 $1,771 8 23 $77 s1,771 15 9 23 10 Total $2,881 20-Apr $74 $77 $1,110 $385 11 15 $1,386 $77 12 5 18 $1,386 13 Total 24-Apr 14 12 $77 $924 6 $77 $462 15 Total $462 $2,835 30-Apr $462 16 35 $81 6 $77 17 35 $81 $2,835 $5,157 18 $3,297

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Step 2

Calculation formulas:...

B
C D
Purchases
E
F
G
H
J
K
Cost of merchandise sold
Quantity of
merchandise
3
Inventory
Inventory
Quantity
Date purchased Unit cost Total cost
5 43556
6 43565
quantity Unit cost
- 15 J5
=16 . J6
K6
=I8 JS
4
Unit cost
Total cost
Total cost
sold
52
= 15- F6
74
=J5
-F6*G6
37
74
7
8 43570 23
C8 DS
77
= 16
-CS
-J6
-D8
19 J9
-K8+K9
9
10 Total
11 43575
15
-F11 G11
=F12 G12
=19-F12
| - J9
= I 12 J12
=K12
= I14 J14
=K14
I16 J16
=I17*J17
=SUM(K16K17
12
5
13 Total
14 43579
=F14 G14
= I12-F14 J12
12
-J12
15 Total
-C16 D16
16 43585 35
-J14
-D16
81
= I14
-C16
-SUM(H6H17)
17
18
help_outline

Image Transcriptionclose

B C D Purchases E F G H J K Cost of merchandise sold Quantity of merchandise 3 Inventory Inventory Quantity Date purchased Unit cost Total cost 5 43556 6 43565 quantity Unit cost - 15 J5 =16 . J6 K6 =I8 JS 4 Unit cost Total cost Total cost sold 52 = 15- F6 74 =J5 -F6*G6 37 74 7 8 43570 23 C8 DS 77 = 16 -CS -J6 -D8 19 J9 -K8+K9 9 10 Total 11 43575 15 -F11 G11 =F12 G12 =19-F12 | - J9 = I 12 J12 =K12 = I14 J14 =K14 I16 J16 =I17*J17 =SUM(K16K17 12 5 13 Total 14 43579 =F14 G14 = I12-F14 J12 12 -J12 15 Total -C16 D16 16 43585 35 -J14 -D16 81 = I14 -C16 -SUM(H6H17) 17 18

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