Question

Perpetual Inventory Using LIFO Beginning inventory, purchases, and sales data for prepaid cell phones for May are as follows: Inventory Purchases Sales May 1 1,400 units at $21 May 10 700 units at $23 May 12 980 units May 20 630 units at $25 May 14 840 units May 31 420 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.

Answer 1

Perpetual : LIFO ( Last In First Out) Unit Date Qty Cost total cost Qty May-01 May-10 700 23.00 16100 Unit Cost total cost Qty Unit Cost total Cost 1400 21.00 29400 1400 21.00 29400 700 23.00 16100 23520 May-12 700 280 840 23.00 21.00 21.00 16100 5880 17640 280 May-14 May-20 630 25.00 15750.00 280 630 280 21.00 21.00 25.00 21.00 25.00 5880 5880 15750 5880 5250 11130 May-31 420 25 10500 210 Totals 2240 50120 490