Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales data for portable DVD players are as follows: Apr. 1 Inventory 72 units @ $79 10 Sale 60 units Purchase 42 units @ $82 20 Sale 19 units 24 Sale 22 units Purchase 35 units @ $85 The business maintains a perpetual inventory system, costing by the first-in, first-out method. 30 Determine the cost of the merchandise sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 3. 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. Cost of the Merchandise Sold Schedule First-in, First-out Method Portable DVD Players Quantity Cost of Cost of Merchandise Sold Cost of Merchandise Sold Merchandise Sold Unit Cost Total Cost Date Inventory Inventory Unit Inventory Total Quantity Purchased Purchases Unit Cost Purchases Total Cost Apr. Apr. 100001 000 Polli 001 Apr. Balances 30 b. Based upon the preceding data, would you expect the inventory to be higher or lower using the last in, first-out method? Entries and Perpetual Inventory Account (FIFO) EXHIBIT 3 Item 127B Jan. 4 Accounts Receivable Sales 4 Cost of Merchandise Sold Merchandise Inventory 21,000 21,000 14,000 14,000 Cost of Merchandise Sold Purchases Unit Cost Total Cost Unit Cost Inventory Unit Quantity Cost Total Cost Total Cost Quantity 11,200 Date 10 Merchandise Inventory Accounts Payable 11,200 Jan. 1 1.000 700 20.00 14,000 300 20.00 20.00 20.00 22.40 20,000 6,000 6,000 11,200 500 22.40 11,200 300 500 22 Accounts Receivable Sales 22 Cost of Merchandise Sold Merchandise Inventory 10,800 10,800 7,344 7,344 22 300 60 240 20.00 22.40 22.40 6,000 1.344 5,376 28 7,200 440 200 200 600 22.40 22.40 22.40 23.30 28 Accounts Receivable Sales 28 Cost of Merchandise Sold Merchandise Inventory 600 23.30 13,980 9,856 4.480 4,480 13.980 18,460 7,200 5,376 31 Balances 26,720 5,376 13,980 30 Merchandise Inventory Accounts Payable 13,980 Cost of merchandise January 31 inventory sold