PE 7-2B Perpetual inventory using FIFO

Beginning inventory, purchases, and sales for Item CSW15 are as follows:

           Mar. 1           Inventory             100 units at $15
                   7            Sale                     88 units
                  15           Purchase              125 units at $18
                  24           Sale                      75 units
Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine (a) the cost of merchandise sold on March 24 and (b) the inventory on March 31.

Answer:
a. Cost of merchandise sold (March 24):
          12 units @ $15                     $ 180
          63 units @ $18                     1,134
          75                                      $1,314

b. Inventory, March 31: $1,116 = 62 units × $18