Perpetual inventory using FIFO
Beginning inventory, purchases, and sales data for DVD players are as follows:
The business maintains a perpetual inventory system, costing by the firstin firstout 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 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.
Firstin Firstout Method
DVD Players
Cost of Cost of
Quantity Purchases Purchases Quantity Goods Sold Goods Sold Inventory Inventory Inventory
Date
Purchased Unit Cost Total Cost
Sold
Unit Cost Total Cost Quantity Unit Cost Total Cost
Nov.
Nov.
Nov.
Nov.
Nov.
Nov.
Nov. Balances
b Based upon the preceding data, would you expect the inventory to be higher or lower using the lastin firstout method?
