Graded Homework

Perpetual inventory using FIFO ObJ. 2, 3

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

June 1 inventory 240 units at $78 10 sale 180 units 15 Purchase 280 units at $80 20 sale 220 units 24 sale 90 units 30 Purchase 320 units at $86

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?