Question: Perpetual Inventory Using FIFO
Beginning inventory, purchases, and sales data for portable DVD players are as follows:
Apr. 1 Inventory46 units @ $5410 Sale35 units15 Purchase26 units @ $5620 Sale20 units24 Sale13 units30 Purchase34 units @ $59
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.
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.
b. Based upon the preceding data, would you expect the inventory to be higher or lower using the last-in, first-out method?