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

EX 7-3 Perpetual inventory using FIFO

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

June

1

Inventory

75 units at $40

6

Sale

60 units

14

Purchase

90 units at $42

19

Sale

50 units

25

Sale

20 units

30

Purchase

80 units at $45

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 3.

b. Based upon the preceding data, would you expect the inventory to be higher or lower using the last-in, first-out method?