Question

Beginning inventory, purchases, and sales data for DVD players are as follows: November 1 Inventory 52 units at $79 10 Sale 35 units 15 Purchase 27 units at $83 20 Sale 25 units 24 Sale 13 units 30 Purchase 39 units at $86 The business maintains a perpetual inventory system, costing by the first-in, first-out method.
Determine the cost of the goods sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated.
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 and LOWER unit cost first in the Inventory.

Answer 1

Answer:

November 1 Inventory 52 units at $79

November 10 Sale 35 units

• COGS = 35 x $79 = $2,765
• Inventory balance = 17 x $79 = $1,343

November 15 Purchase 27 units at $83

November 20 Sale 25 units

• COGS = (17 x $79) + (3 x $83) = $1,592
• Inventory balance = (24 x $83) = $1,992

November 24 Sale 13 units

• COGS = 13 x $83 = $1,079
• Inventory balance = 11 x $83 = $913

November 30 Purchase 39 units at $86

• Inventory balance = $913 + (39 x $86) = $4,267