Question

Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales data for prepaid cell phones for May...

Perpetual Inventory Using FIFO

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

Inventory Purchases Sales
May 1 3,500 units at $31 May 10 1,750 units at $33 May 12 2,450 units
May 20 1,575 units at $35 May 14 2,100 units
May 31 1,050 units

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

Schedule of Cost of Merchandise Sold
FIFO Method
Prepaid Cell Phones
Date Purchases Quantity Purchases Unit Cost Purchases Total Cost Cost of Merchandise Sold Quantity Cost of Merchandise Sold Unit Cost Cost of Merchandise Sold Total Cost Inventory Quantity Inventory Unit Cost Inventory Total Cost
May 1 $ $
May 10 $ $
May 12 $ $
May 14
May 20
May 31
May 31 Balances $ $

Homework Answers

Answer #1
Schedule of Cost of Merchandise Sold
FIFO Method
Prepaid Cell Phones
Date Purchases Quantity Purchases Unit Cost Purchases Total Cost Cost of Merchandise Sold Quantity Cost of Merchandise Sold Unit Cost Cost of Merchandise Sold Total Cost Inventory Quantity Inventory Unit Cost Inventory Total Cost
1-May 3500 31 108500
10-May 1750 33 57750 3500 31 108500
1750 33 57750
12-May 2450 31 75950 1050 31 32550
1750 33 57750
14-May 1050 31 32550 700 33 23100
1050 33 34650
20-May 1575 35 55125 700 33 23100
1575 35 55125
31-May 700 33 23100 1225 35 42875
350 35 12250
31-May Balances 178500 42875
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