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

Q: Expert Answer

(a) To determine Perpetual Inventory System: Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases, and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time. To determine: cost of merchandise sold for each sale and inventory balance after each sale of DVD as on November 30. Explanation In First-in-First-Out method, the costs of the initially purchased items are considered as cost of goods sold, for the items which are sold first... (b) To determine To state: if inventory for the preceding data is expected to be higher or lower using last-in-first out method.

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Answer 1

BuyFind

Corporate Financial Accounting

14th Edition

Carl Warren + 2 others

Publisher: Cengage Learning

ISBN: 9781305653535

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Section

Answer 2

BuyFind

Corporate Financial Accounting

14th Edition

Carl Warren + 2 others

Publisher: Cengage Learning

ISBN: 9781305653535

Solutions

Chapter

Section

Answer 3

Solutions

Chapter

Section

Answer 4

Chapter

Section

Answer 5

(a)

To determine

Perpetual Inventory System:

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases, and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

To determine: cost of merchandise sold for each sale and inventory balance after each sale of DVD as on November 30.

Explanation of Solution

In First-in-First-Out method, the costs of the initially purchased items are considered as cost of goods sold, for the items which are sold first...

Answer 6

(b)

To determine

To state: if inventory for the preceding data is expected to be higher or lower using last-in-first out method.

Corporate Financial Accounting

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Corporate Financial Accounting

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The Solution to Your Study Problems

Chapter 6 Solutions

Additional Business Textbook Solutions

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