Question

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

Perpetual Inventory Using LIFO

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

Inventory Purchases Sales
May 1 3,500 units at $38 May 10 1,750 units at $40 May 12 2,450 units
May 20 1,575 units at $42 May 14 2,100 units
May 31 1,050 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.

Homework Answers

Answer #1
PURCHASE COST OF GOODS SOLD INVENTORY AT END
# of units unit cost Total # of units unit cost Total # of units unit cost Total
May 1 3500 38 133000
May 10 1750 40 70000 3500 38 133000
1750 40 70000
May 12 1750 40 70000
700 38 26600 3500-700= 2800 38 106400
May 14 2100 38 79800 2800-2100=700 38 26600
May 20 1575 42 66150 700 38 26600
1575 42 66150
May 31 1050 42 44100 700 38 26600
1575-1050=525 42 22050
cost of goods sold Inventory
May 12 70000+26600= 96600 106400
May 14 79800 26600
May 31 44100 26600+22050= 48650
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