Question

Perpetual Inventory Using LIFO

Beginning inventory, purchases, and sales data for portable game players are as follows:

Apr. 1		Inventory	56 units @ $98
10		Sale	43 units
15		Purchase	73 units @ $104
20		Sale	42 units
24		Sale	11 units
30		Purchase	28 units @ $110

The business maintains a perpetual inventory system, costing by the last-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 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.

Schedule of Cost of Merchandise Sold
LIFO Method
Portable Game Players
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
Apr. 1								$	$
Apr. 10					$	$
Apr. 15		$	$
Apr. 20
Apr. 24
Apr. 30
Apr. 30	Balance					$			$

Answer 1

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.

Schedule of Cost of Merchandise Sold
LIFO Method
Portable Game Players
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
Apr. 1							56	$98	$5488
Apr. 10				43	$98	$4214
Apr. 15	73	$104	$7592				13	98	1274
							73	104	7592
Apr. 20				42	104	4368	13	98	1274
							31	104	3224
Apr. 24				11	104	1144	13	98	1274
							20	104	2080
Apr. 30	28	110	3080				13	98	1274
							20	104	2080
							28	110	3080
Apr. 30	Balance					$9726			$6434

Cost of merchandise sold = $9726

Ending inventory = $6434