Perpetual Inventory Using LIFO Beginning inventory, purchases, and sales data for prepaid cell phones for December are as follows: Inventory Purchases Sales Dec. 1 2,500 units at $31 Dec. 10 1,250 units at $33 Dec. 12 1,750 units Dec. 20 1,125 units at $35 Dec. 14 1,500 units Dec. 31 750 units a. Assuming that the perpetual inventory system is used, costing by the LIFO method, determine the cost of goods 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 Goods Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column. Schedule of Cost of Goods SoldLIFO MethodPrepaid Cell Phones Date Quantity Purchased Purchases Unit Cost Purchases Total Cost Quantity Sold Cost of Goods Sold Unit Cost Cost of Goods Sold Total Cost Inventory Quantity Inventory Unit Cost Inventory Total Cost Dec. 1 fill in the blank 37569600a04cf91_1 fill in the blank 37569600a04cf91_2 fill in the blank 37569600a04cf91_3 Dec. 10 fill in the blank 37569600a04cf91_4 fill in the blank 37569600a04cf91_5 fill in the blank 37569600a04cf91_6 fill in the blank 37569600a04cf91_7 fill in the blank 37569600a04cf91_8 fill in the blank 37569600a04cf91_9 fill in the blank 37569600a04cf91_10 fill in the blank 37569600a04cf91_11 fill in the blank 37569600a04cf91_12 Dec. 12 fill in the blank 37569600a04cf91_13 fill in the blank 37569600a04cf91_14 fill in the blank 37569600a04cf91_15 fill in the blank 37569600a04cf91_16 fill in the blank 37569600a04cf91_17 fill in the blank 37569600a04cf91_18 fill in the blank 37569600a04cf91_19 fill in the blank 37569600a04cf91_20 fill in the blank 37569600a04cf91_21 Dec. 14 fill in the blank 37569600a04cf91_22 fill in the blank 37569600a04cf91_23 fill in the blank 37569600a04cf91_24 fill in the blank 37569600a04cf91_25 fill in the blank 37569600a04cf91_26 fill in the blank 37569600a04cf91_27 Dec. 20 fill in the blank 37569600a04cf91_28 fill in the blank 37569600a04cf91_29 fill in the blank 37569600a04cf91_30 fill in the blank 37569600a04cf91_31 fill in the blank 37569600a04cf91_32 fill in the blank 37569600a04cf91_33 fill in the blank 37569600a04cf91_34 fill in the blank 37569600a04cf91_35 fill in the blank 37569600a04cf91_36 Dec. 31 fill in the blank 37569600a04cf91_37 fill in the blank 37569600a04cf91_38 fill in the blank 37569600a04cf91_39 fill in the blank 37569600a04cf91_40 fill in the blank 37569600a04cf91_41 fill in the blank 37569600a04cf91_42 fill in the blank 37569600a04cf91_43 fill in the blank 37569600a04cf91_44 fill in the blank 37569600a04cf91_45 Dec. 31 Balances fill in the blank 37569600a04cf91_46 fill in the blank 37569600a04cf91_47 b. Based upon the preceding data, would you expect the inventory to be higher or lower using the first-in, first-out method?
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
Perpetual Inventory Using LIFO
Beginning inventory, purchases, and sales data for prepaid cell phones for December are as follows:
| Inventory | Purchases | Sales | |||
| Dec. 1 | 2,500 units at $31 | Dec. 10 | 1,250 units at $33 | Dec. 12 | 1,750 units |
| Dec. 20 | 1,125 units at $35 | Dec. 14 | 1,500 units | ||
| Dec. 31 | 750 units |
a. Assuming that the perpetual inventory system is used, costing by the LIFO method, determine the cost of goods 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 Goods Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column.
Date |
Quantity Purchased |
Purchases Unit Cost |
Purchases Total Cost |
Quantity Sold |
Cost of Goods Sold Unit Cost |
Cost of Goods Sold Total Cost |
Inventory Quantity |
Inventory Unit Cost |
Inventory Total Cost |
| Dec. 1 | fill in the blank 37569600a04cf91_1 | fill in the blank 37569600a04cf91_2 | fill in the blank 37569600a04cf91_3 | ||||||
| Dec. 10 | fill in the blank 37569600a04cf91_4 | fill in the blank 37569600a04cf91_5 | fill in the blank 37569600a04cf91_6 | fill in the blank 37569600a04cf91_7 | fill in the blank 37569600a04cf91_8 | fill in the blank 37569600a04cf91_9 | |||
| fill in the blank 37569600a04cf91_10 | fill in the blank 37569600a04cf91_11 | fill in the blank 37569600a04cf91_12 | |||||||
| Dec. 12 | fill in the blank 37569600a04cf91_13 | fill in the blank 37569600a04cf91_14 | fill in the blank 37569600a04cf91_15 | fill in the blank 37569600a04cf91_16 | fill in the blank 37569600a04cf91_17 | fill in the blank 37569600a04cf91_18 | |||
| fill in the blank 37569600a04cf91_19 | fill in the blank 37569600a04cf91_20 | fill in the blank 37569600a04cf91_21 | |||||||
| Dec. 14 | fill in the blank 37569600a04cf91_22 | fill in the blank 37569600a04cf91_23 | fill in the blank 37569600a04cf91_24 | fill in the blank 37569600a04cf91_25 | fill in the blank 37569600a04cf91_26 | fill in the blank 37569600a04cf91_27 | |||
| Dec. 20 | fill in the blank 37569600a04cf91_28 | fill in the blank 37569600a04cf91_29 | fill in the blank 37569600a04cf91_30 | fill in the blank 37569600a04cf91_31 | fill in the blank 37569600a04cf91_32 | fill in the blank 37569600a04cf91_33 | |||
| fill in the blank 37569600a04cf91_34 | fill in the blank 37569600a04cf91_35 | fill in the blank 37569600a04cf91_36 | |||||||
| Dec. 31 | fill in the blank 37569600a04cf91_37 | fill in the blank 37569600a04cf91_38 | fill in the blank 37569600a04cf91_39 | fill in the blank 37569600a04cf91_40 | fill in the blank 37569600a04cf91_41 | fill in the blank 37569600a04cf91_42 | |||
| fill in the blank 37569600a04cf91_43 | fill in the blank 37569600a04cf91_44 | fill in the blank 37569600a04cf91_45 | |||||||
| Dec. 31 | Balances | fill in the blank 37569600a04cf91_46 | fill in the blank 37569600a04cf91_47 |
b. Based upon the preceding data, would you expect the inventory to be higher or lower using the first-in, first-out method?
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