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

Required

Prepare 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.

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Question content area right

Part 1

Prepare the perpetual inventory record. In this step, work on the inventory on hand. Start by entering the opening balance of inventory. Enter the transactions for the purchases and sales in chronological order. When entering sales, enter the oldest cost in the first line. Be sure to calculate the balance after each

transaction.

(Use parentheses or a minus sign in front of the quantity and the total cost when those numbers are subtracted from inventory.)

Date	Quantity	Unit Cost	Total Cost
Balance
Balance
Balance
Ending Inventory