Perpetual Inventory Using FIFO Assume that the business maintains a perpetual in

Question

Perpetual Inventory Using FIFO

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

Aug. 1

775

$ 44

$ 34,100

Aug. 10

  

$  

$  

  

  

  

  

  

  

Aug.12

  

$  

$  

  

  

  

  

  

  

Aug. 14

  

  

  

  

  

  

  

  

  

Aug. 20

  

  

  

  

  

  

  

  

  

Aug. 31

  

  

  

  

  

  

  

  

  

Aug. 31

Balances

$  

$  

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Hint(s)

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

Aug. 1

775

$ 44

$ 34,100

Aug. 10

  

$  

$  

  

  

  

  

  

  

Aug.12

  

$  

$  

  

  

  

  

  

  

Aug. 14

  

  

  

  

  

  

  

  

  

Aug. 20

  

  

  

  

  

  

  

  

  

Aug. 31

  

  

  

  

  

  

  

  

  

Aug. 31

Balances

$  

$  

Explanation / Answer

Schedule of Cost of Merchandise Sold LIFO Method Prepaid Cell Phones Date Quantity Purchased Purchases Unit Cost Purchases Total Cost Quantity Sold Cost of Merchandise Sold Unit Cost Cost of Merchandise Sold Total Cost Inventory Quantity Inventory Unit Cost Inventory Total Cost Aug. 1 775 44 34100 Aug.10 360 45 16200 775 44 34100 360 45 16200 Aug. 12 360 45 16200 240 44 10560 120 44 5280 Aug. 14 415 44 18260 535 44 23540 Aug. 20 600 48 28800 120 44 5280 600 48 28800 Aug. 31 500 48 24000 120 44 5280 100 48 4800 Aug. 31 Balances Total 45000 69020 Cost of Marchendise sold 600 units 26760 415 units 18260 500 units 24000 Inventory Balance: 120 units 5280 100 units 4800 Inventory Balance 10080

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