Perpetual Inventory Using LIFO Beginning inventory, purchases, and sales data for prepaid cell phones for May are as follows: Inventory Purchases May 10 Sales May 12 May 1 2,900 units at $37 1,450 units at $39 1,305 units at $41 2,030 units 1,740 units 20 14 31 870 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 Inventory Inventory Inventory Quantity Purchases Purchases Quantity Date Purchased Unit Cost Total Cost Sold Quantity Unit Cost Total Cost May 1 May 10 May 12 May 14 May 20 May 31 May 31 Balances b. Based upon the preceding data, would you expect the inventory to be higher or lower using the first-in, first-out method? 0 0 000 0 Cost of Cost of Merchandise Merchandise. Sold Sold Unit Cost Total Cost 0 000 00 000 000000000 00⁰⁰0⁰ 00⁰⁰!!
Perpetual Inventory Using LIFO Beginning inventory, purchases, and sales data for prepaid cell phones for May are as follows: Inventory Purchases May 10 Sales May 12 May 1 2,900 units at $37 1,450 units at $39 1,305 units at $41 2,030 units 1,740 units 20 14 31 870 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 Inventory Inventory Inventory Quantity Purchases Purchases Quantity Date Purchased Unit Cost Total Cost Sold Quantity Unit Cost Total Cost May 1 May 10 May 12 May 14 May 20 May 31 May 31 Balances b. Based upon the preceding data, would you expect the inventory to be higher or lower using the first-in, first-out method? 0 0 000 0 Cost of Cost of Merchandise Merchandise. Sold Sold Unit Cost Total Cost 0 000 00 000 000000000 00⁰⁰0⁰ 00⁰⁰!!
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Perpetual Inventory Using LIFO
Beginning inventory, purchases, and sales data for prepaid cell phones for May are as follows:
Inventory
Purchases
May 10
May 1
2,900 units at $37
1,450 units at $39
1,305 units at $41
Sales
May 12
14
2,030 units
1,740 units
20
31
870 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
Cost of
Merchandise
Sold
Purchases Purchases Quantity
Quantity
Unit Cost
Inventory Inventory Inventory
Quantity Unit Cost Total Cost
Unit Cost Total Cost Sold
Date Purchased
May 1
BE
May 10
May 12
May 14.
May 20
May 31
May 31 Balances
b. Based upon the preceding data, would you expect the inventory to be higher or lower using the first-in, first-out method?
Cost of
Merchandise
Sold
Total Cost
00000 0000
000000000
10000 000000
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