Perpetual Inventory Using LIFO Beginning inventory, purchases, and sales data for prepaid cell phones for May are as follows: Inventory Purchases Sales May 1 1,800 units at $31 May 10 20 900 units at $33 810 units at $35 May 12 1,260 units 14 1,080 units 31 540 units a. Assuming that the perpetual inventory system is used, costing by the LIFO method, determine the cost of merchandise sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 4. Under LIFO, if units are in inventory at two different costs, enter the units with the HIGHER unit cost first in the Cost of Merchandise Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column. Schedule of Cost of Merchandise Sold LIFO Method Prepaid Cell Phones Purchases Purchases Date Quantity Purchased Unit Cost Total Cost Quantity Sold Cost of Merchandise Sold Unit Cost Cost of Merchandise Sold Total Cost Inventory Inventory Inventory Quantity Unit Cost Total Cost May 1 May 10 900 ✓ $ 33 29,700 May 12 May 14 May 20 May 31 May 31 Balances Feedback 1,260 X $ 35 X $ 44,100 X 1,080 ✔ 35 X 37,800 X ▼Check My Work a. Note that this exercise uses the perpetual inventory system. When the perpetual inventory system is used, revenue is recorded each time a sale is made along with an entry to record the cost of the merchandise sold. LIFO means the last units purchased are assumed to be the first to
Perpetual Inventory Using LIFO Beginning inventory, purchases, and sales data for prepaid cell phones for May are as follows: Inventory Purchases Sales May 1 1,800 units at $31 May 10 20 900 units at $33 810 units at $35 May 12 1,260 units 14 1,080 units 31 540 units a. Assuming that the perpetual inventory system is used, costing by the LIFO method, determine the cost of merchandise sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 4. Under LIFO, if units are in inventory at two different costs, enter the units with the HIGHER unit cost first in the Cost of Merchandise Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column. Schedule of Cost of Merchandise Sold LIFO Method Prepaid Cell Phones Purchases Purchases Date Quantity Purchased Unit Cost Total Cost Quantity Sold Cost of Merchandise Sold Unit Cost Cost of Merchandise Sold Total Cost Inventory Inventory Inventory Quantity Unit Cost Total Cost May 1 May 10 900 ✓ $ 33 29,700 May 12 May 14 May 20 May 31 May 31 Balances Feedback 1,260 X $ 35 X $ 44,100 X 1,080 ✔ 35 X 37,800 X ▼Check My Work a. Note that this exercise uses the perpetual inventory system. When the perpetual inventory system is used, revenue is recorded each time a sale is made along with an entry to record the cost of the merchandise sold. LIFO means the last units purchased are assumed to be the first to
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
FIFO
Transcribed Image Text:Perpetual Inventory Using LIFO
Beginning inventory, purchases, and sales data for prepaid cell phones for May are as follows:
Inventory
Purchases
Sales
May 1
1,800 units at $31
May 10
20
900 units at $33
810 units at $35
May 12
1,260 units
14
1,080 units
31
540 units
a. Assuming that the perpetual inventory system is used, costing by the LIFO method, determine the cost of merchandise sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 4. Under LIFO, if units are in inventory at two different
costs, enter the units with the HIGHER unit cost first in the Cost of Merchandise Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column.
Schedule of Cost of Merchandise Sold
LIFO Method
Prepaid Cell Phones
Purchases
Purchases
Date
Quantity
Purchased
Unit Cost
Total Cost
Quantity
Sold
Cost of
Merchandise
Sold
Unit Cost
Cost of
Merchandise
Sold
Total Cost
Inventory Inventory Inventory
Quantity Unit Cost Total Cost
May 1
May 10
900
✓ $
33
29,700
May 12
May 14
May 20
May 31
May 31 Balances
Feedback
1,260 X $
35 X
$
44,100 X
1,080 ✔
35
X
37,800 X
▼Check My Work
a. Note that this exercise uses the perpetual inventory system. When the perpetual inventory system is used, revenue is recorded each time a sale is made along with an entry to record the cost of the merchandise sold. LIFO means the last units purchased are assumed to be the first to
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