Perpetual Inventory Using A method of inventory costing based on the assumption
ID: 2542439 • Letter: P
Question
Perpetual Inventory Using A method of inventory costing based on the assumption that the most recent merchandise inventory costs should be charged against revenue.LIFO
Beginning inventory, purchases, and sales data for prepaid cell phones for May are as follows:
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 5. 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.
Inventory Purchases Sales May 1 1,550 units at $44 May 10 720 units at $45 May 12 1,200 units May 20 1,200 units at $48 May 14 830 units May 31 1,000 unitsExplanation / Answer
Determine cost of goods sold and inventory balance under LIFO :
1550
720
44
45
68200
32400
720
480
45
44
32400
21120
240
1200
44
48
10560
57600
240
200
44
48
10560
9600
Purchase Cost of goods sold Inventory balance Date Qty Unit cost Total cost Qty Unit cost Total cost Qty Unit cost Total cost May 1 1550 44 68200 May 10 720 45 324001550
720
44
45
68200
32400
May 12720
480
45
44
32400
21120
1070 44 47080 May 14 830 44 36520 240 44 10560 May 20 1200 48 57600240
1200
44
48
10560
57600
May 31 1000 48 48000240
200
44
48
10560
9600
May 31 Balances 138040 20160Related Questions
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