Question

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					$			$

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