Perpetual Inventory Using FIFO

Beginning inventory, purchases, and sales data for DVD players are as follows:

November 1 Inventory 60 units at $46

10 Sale 41 units

15 Purchase 25 units at $48

20 Sale 26 units

24 Sale 14 units

30 Purchase 38 units at $50

The business maintains a perpetual inventory system, costing by the first-in, first-out method.

a. Determine the cost of the goods sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 3. 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.

Cost of the Goods Sold Schedule

First-in, First-out Method

DVD Players

Date Quantity Purchased Purchases Unit Cost Purchases Total Cost Quantity Sold Cost of Goods Sold Unit Cost Cost of Goods Sold Total Cost Inventory Quantity Inventory Unit Cost Inventory Total Cost

Nov. 1

$

$

Nov. 10

$

$

Nov. 15

$

$

Nov. 20

Nov. 24

Nov. 30

Nov. 30 Balances $

$

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