requirement 1 prepare a perpetual inventory record for the merchandise inventory using the fifo inventory…

requirement 1 prepare a perpetual inventory record for the merchandise inventory using the fifo inventory - costing method\nstart by entering the beginning inventory balances. enter the transactions in chronological order, calculating new inventory on - hand balances after each transaction. once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (for inventory on hand, enter the oldest inventory layers first. for cost of goods sold, enter the inventory layers in the order in which they are removed from inventory.)\n\n| | purchases | cost of goods sold | inventory on hand |\n|--|--|--|--|--|--|\n| date | quantity | unit cost | total cost | quantity | unit cost | total cost | quantity | unit cost | total cost |\n| aug. 1 | | | | | | | | | |\n| 3 | | | | | | | | | |\n| 8 | | | | | | | | | |\n| 21 | | | | | | | | | |\n| 30 | | | | | | | | | |\n| totals | | | | | | | | | |\n\ntransactions\n| | units | unit cost | unit sales price |\n| aug. 3 | sale | 35 | | 63 |\n| aug. 8 | purchase | 70 | $32 | |\n| aug 21 | sale | 65 | | 77 |\n| aug. 30 | purchase | 25 | 47 | |

requirement 1 prepare a perpetual inventory record for the merchandise inventory using the fifo inventory - costing method\nstart by entering the beginning inventory balances. enter the transactions in chronological order, calculating new inventory on - hand balances after each transaction. once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (for inventory on hand, enter the oldest inventory layers first. for cost of goods sold, enter the inventory layers in the order in which they are removed from inventory.)\n\n| | purchases | cost of goods sold | inventory on hand |\n|--|--|--|--|--|--|\n| date | quantity | unit cost | total cost | quantity | unit cost | total cost | quantity | unit cost | total cost |\n| aug. 1 | | | | | | | | | |\n| 3 | | | | | | | | | |\n| 8 | | | | | | | | | |\n| 21 | | | | | | | | | |\n| 30 | | | | | | | | | |\n| totals | | | | | | | | | |\n\ntransactions\n| | units | unit cost | unit sales price |\n| aug. 3 | sale | 35 | | 63 |\n| aug. 8 | purchase | 70 | $32 | |\n| aug 21 | sale | 65 | | 77 |\n| aug. 30 | purchase | 25 | 47 | |

Answer

Explanation:

Step1: Set up beginning inventory

Assume beginning inventory is 0 (not given in problem - start from Aug 1).

Date Purchases Cost of Goods Sold Inventory on Hand
Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost
Aug 1 0 0 0 0 0 0 0 0 0

Step2: Aug 3 Sale

Since beginning inventory is 0, cannot make sale. But if we assume some initial inventory in real - world, we would take from oldest layer. Here we note the sale details.

Date Purchases Cost of Goods Sold Inventory on Hand
Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost
Aug 1 0 0 0 0 0 0 0 0 0
Aug 3 0 0 0 35 - - - 35 - -

Step3: Aug 8 Purchase

Add 70 units at $32 each.

Date Purchases Cost of Goods Sold Inventory on Hand
Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost
Aug 1 0 0 0 0 0 0 0 0 0
Aug 3 0 0 0 35 - - - 35 - -
Aug 8 70 32 $70\times32 = 2240$ 0 0 0 $70 - 35=35$ 32 $35\times32 = 1120$

Step4: Aug 21 Sale

We first use the remaining 35 units from Aug 8 purchase and then take 30 more units from the new purchase. Cost of Goods Sold: $35\times32+(65 - 35)\times32=35\times32 + 30\times32=(35 + 30)\times32=65\times32 = 2080$ Inventory on Hand: $70-(35 + 30)=5$ units at $32 each

Date Purchases Cost of Goods Sold Inventory on Hand
Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost
Aug 1 0 0 0 0 0 0 0 0 0
Aug 3 0 0 0 35 - - - 35 - -
Aug 8 70 32 2240 0 0 0 35 32 1120
Aug 21 0 0 0 65 32 2080 $35+70-(35 + 65)=5$ 32 $5\times32 = 160$

Step5: Aug 30 Purchase

Add 25 units at $47 each.

Date Purchases Cost of Goods Sold Inventory on Hand
Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost
Aug 1 0 0 0 0 0 0 0 0 0
Aug 3 0 0 0 35 - - - 35 - -
Aug 8 70 32 2240 0 0 0 35 32 1120
Aug 21 0 0 0 65 32 2080 5 32 160
Aug 30 25 47 $25\times47 = 1175$ 0 0 0 $5 + 25=30$ 32 (5 units), 47 (25 units) $5\times32+25\times47=160 + 1175 = 1335$

Step6: Calculate Totals

Purchases: $2240+1175 = 3415$ Cost of Goods Sold: $2080$ Inventory on Hand: 30 units with total cost of $1335$

Date Purchases Cost of Goods Sold Inventory on Hand
Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost
Totals $70 + 25=95$ - 3415 $35+65 = 100$ - 2080 30 - 1335

Answer:

Date Purchases Cost of Goods Sold Inventory on Hand
Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost
Aug 1 0 0 0 0 0 0 0 0 0
Aug 3 0 0 0 35 - - - 35 - -
Aug 8 70 32 2240 0 0 0 35 32 1120
Aug 21 0 0 0 65 32 2080 5 32 160
Aug 30 25 47 1175 0 0 0 30 32 (5 units), 47 (25 units) 1335
Totals 95 - 3415 100 - 2080 30 - 1335