E6-2 Elmo's Music carries a large inventory of guitars and other musical instruments. The store uses the FIFO method and a perpetual inventory system. Company records indicate the following for a particular line of guitars that sell for $1,600 each:

Date Item Quantity Unit Cost

May 1 Balance 5 $900 6 Sale 3 8 Purchase 10 840 17 Sale 4 30 Purchase 5 840

Required

make a perpetual inventory record for the guitars. Then determine the amounts Elmo's Music should report for ending inventory and cost of goods sold under the FIFO method.

1 Measuring ending inventory and cost of goods sold in a perpetual system

FIFO Cost of goods sold, $6,180

E6-4 Refer to the Elmo's Music inventory data in E6-2, except assume that the store uses the moving-weighted-average-cost method. Prepare Elmo's Music Store's perpetual inventory record for the guitars on the moving-weighted-average-cost basis. Round average cost per unit to the nearest cent and all other amounts to the nearest dollar.

1 Applying the moving-weighted-average-cost method in a perpetual inventory system

Cost of goods sold, $6,100