Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales data fo

Question

Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales data for prepaid cell phones for December are as follows: Inventor)y Dec. 1 Purchase:s Dec. 10 Dec. 20 Sales Dec. 12 154 units Dec. 14 132 units Dec. 3166 units 220 units at $28 110 units at $30 99 units at $32 Assume that the business maintains a perpetual inventory system, costing by the first-in, first-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 FIFO, 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.

Explanation / Answer

FIFO:

Date Purchase qty Purchase unit cost Total cost Cost of goods sold Qty Cost of goods sold unit cost cost of goods sold Total cost Inventory qty Inventory unit cost Inventory total cost Dec1 220 28 6160 Dec 10 110 30 3300 220 28 6160 110 30 3300 Dec 12 154 28 4312 220-154=66 28 1848 110 30 3300 Dec 14 66 28 1848 110-66=44 30 1320 132-66=66 30 1980 Dec 20 99 32 3168 44 30 1320 99 32 3168 dec 31 44 30 1320 99-22=77 32 2464 66-44=22 32 704 dec Balance 10164 2464

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