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	2,400 units at $22	May 10	1,200 units at $24	May 12	1,680 units
		May 20	1,080 units at $26	May 14	1,440 units
				May 31	720 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.

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
May 1								$	$
May 10		$	$
May 12					$	$
May 14
May 20
May 31
May 31	Balances					$			$

Answer 1

• Requirement asked

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
May-01							2400	$22	$52,800
May-10	1200	$24	$28,800				2400	$22	$52,800
							1200	$24	$28,800
May-12				1200	$24	$28,800	1920	$22	$42,240
				480	$22	$10,560
May-14				1440	$22	$31,680	480	$22	$10,560
May-20	1080	$26	$28,080				480	$22	$10,560
							1080	$26	$28,080
May-31				720	$26	$18,720	480	$22	$10,560
							360	$26	$9,360
May-31	Balances		$56,880			$89,760			$19,920