Perpetual Inventory Using LIFO Beginning inventory, purchases, and sales data for prepaid cell phones for December are as follows: Inventory Purchases Sales Dec. 1 310 units at $88 Dec. 10 144 units at $90 Dec. 12 240 units Dec. 20 240 units at $96 Dec. 14 166 units Dec. 31 200 units Assume that the business maintains a perpetual inventory system, costing by the LAST-in, LAST-out 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 3. Under LIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Goods Sold Unit Cost column and in the Inventory Unit Cost column. Schedule of Cost of Goods Sold FIFO Method Prepaid Cell Phones Date PurchasesQuantity PurchasesUnit Cost PurchasesTotal Cost Cost ofGoods SoldQuantity Cost ofGoods SoldUnit Cost Cost ofGoods SoldTotal Cost InventoryQuantity InventoryUnit Cost InventoryTotal Cost Dec. 1 Dec. 10 Dec. 12 Dec. 14 Dec. 20 Dec. 31 Dec. 31 Balances

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Perpetual Inventory Using LIFO

Beginning inventory, purchases, and sales data for prepaid cell phones for December are as follows:

Inventory		Purchases		Sales
Dec. 1	310 units at $88	Dec. 10	144 units at $90	Dec. 12	240 units
		Dec. 20	240 units at $96	Dec. 14	166 units
				Dec. 31	200 units

Assume that the business maintains a perpetual inventory system, costing by the LAST-in, LAST-out 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 3. Under LIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Goods Sold Unit Cost column and in the Inventory Unit Cost column.

Schedule of Cost of Goods Sold
FIFO Method
Prepaid Cell Phones
Date	Purchases Quantity	Purchases Unit Cost	Purchases Total Cost	Cost of Goods Sold Quantity	Cost of Goods Sold Unit Cost	Cost of Goods Sold Total Cost	Inventory Quantity	Inventory Unit Cost	Inventory Total Cost
Dec. 1
Dec. 10

Dec. 12

Dec. 14

Dec. 20

Dec. 31

Dec. 31	Balances

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