Question - Perpetual inventory using FIFO
Beginning inventory, purchases, and sales data for portable DVD players are as follows:
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June 1
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Inventory
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240 units at $78
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June 10
|
Sale
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180 units
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June 15
|
Purchase
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280 units at $80
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|
June 20
|
Sale
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220 units
|
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June 24
|
Sale
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90 units
|
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June 30
|
Purchase
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320 units at $86
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The business maintains a perpetual inventory system, costing by the first-in, first-out method.
a. 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 4.
b. Based upon the preceding data, would you expect the inventory to be higher or lower using the last-in, first-out method?