Perpetual Inventory Using FIFOThe following units of a particular item were available for sale during the calendar year:Jan. 1Inventory4,000 units at $20Apr. 19Sale2,500 unitsJune 30Purchase6,000 units at $24Sept. 2Sale4,500 unitsNov. 15Purchase1,000 units at $25The firm maintains a perpetual inventory system. Determine the cost of merchandise sold for each sale and the inventory balance after each sale, assuming the first-in, first-out method. Present the data in the form illustrated in Exhibit 3. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Merchandise Sold Unit Cost column and in the Inventory Unit Cost column.Schedule of Cost of Merchandise SoldFIFO Method PurchasesCost of Merchandise SoldInventoryDateQuantityUnit CostTotal CostQuantityUnit CostTotal CostQuantityUnit CostTotal CostJan. 1 fill in the blank 1$fill in the blank 2$fill in the blank 3Apr. 19 fill in the blank 4$fill in the blank 5$fill in the blank 6fill in the blank 7fill in the blank 8fill in the blank 9June 30fill in the blank 10$fill in the blank 11$fill in the blank 12 fill in the blank 13fill in the blank 14fill in the blank 15fill in the blank 16fill in the blank 17fill in the blank 18Sept. 2 fill in the blank 19fill in the blank 20fill in the blank 21fill in the blank 22fill in the blank 23fill in the blank 24fill in the blank 25fill in the blank 26fill in the blank 27Nov. 15fill in the blank 28fill in the blank 29fill in the blank 30 fill in the blank 31fill in the blank 32fill in the blank 33fill in the blank 34fill in the blank 35fill in the blank 36Dec. 31Balances $fill in the blank 37 $fill in the blank 38

Name: Perpetual Inventory Using FIFOThe following units of a particular item
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Description: Perpetual Inventory Using FIFOThe following units of a particular item were available for sale during the calendar year:Jan. 1Inventory4,000 units at $20Apr. 19Sale2,500 unitsJune 30Purchase6,000 units at $24Sept. 2Sale4,500 unitsNov. 15Purchase1,000

First-in-First-Out (FIFO): In this method, items purchased initially are sold first. So, the value of the ending inventory consists of the recent cost for the remaining unsold items. Perpetual inventory system: The method or system of maintaining, recording, and adjusting the inventory perpetually throughout the year, is referred to as a perpetual inventory system. Determine the cost of merchandise sold for each sale and the inventory balance after each sale, assuming the first-in, first-out method:

Answered: Perpetual Inventory Using FIFO The…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Perpetual Inventory Using FIFO

The following units of a particular item were available for sale during the calendar year:

Jan. 1	Inventory	4,000 units at $20
Apr. 19	Sale	2,500 units
June 30	Purchase	6,000 units at $24
Sept. 2	Sale	4,500 units
Nov. 15	Purchase	1,000 units at $25

The firm maintains a perpetual inventory system. Determine the cost of merchandise sold for each sale and the inventory balance after each sale, assuming the first-in, first-out method. Present 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 Merchandise Sold Unit Cost column and in the Inventory Unit Cost column.

Schedule of Cost of Merchandise Sold FIFO Method
	Purchases	Cost of Merchandise Sold	Inventory
Date	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
Jan. 1							fill in the blank 1	$fill in the blank 2	$fill in the blank 3
Apr. 19				fill in the blank 4	$fill in the blank 5	$fill in the blank 6	fill in the blank 7	fill in the blank 8	fill in the blank 9
June 30	fill in the blank 10	$fill in the blank 11	$fill in the blank 12				fill in the blank 13	fill in the blank 14	fill in the blank 15
fill in the blank 16	fill in the blank 17	fill in the blank 18
Sept. 2				fill in the blank 19	fill in the blank 20	fill in the blank 21	fill in the blank 22	fill in the blank 23	fill in the blank 24
fill in the blank 25	fill in the blank 26	fill in the blank 27
Nov. 15	fill in the blank 28	fill in the blank 29	fill in the blank 30				fill in the blank 31	fill in the blank 32	fill in the blank 33
fill in the blank 34	fill in the blank 35	fill in the blank 36
Dec. 31	Balances					$fill in the blank 37			$fill in the blank 38

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