Question

In: Accounting

Cells with non-gray backgrounds are protected and cannot be edited.


pboard Alignment Number 226 x fx A B C D E F G 9 Answers are entered in the cells with gray backgrounds. 10 Cells with non-gr



to be higher or lower The business matt a. Determine the cost of goods sold lub presenting the data in the form illustrated i

Cells with non-gray backgrounds are protected and cannot be edited. 

An astensk (*) will appear to the night of an incorrect entry. Only final inventory cost-Column K - will be graded. 

 Based on the above data, inventory will be higher using the first in first out method.

EX 6-5 Perpetual inventory using LIFO 

Beginning inventory, purchases, and sales data for prepaid cell phones for December  are as follow:


a. Assuming that the perpetual inventory system is used, costing by the LIFO 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 4. 

b. Based upon the preceding data, would you expect the inventory to be higher or lower using the first-in, first-out method? 

Solutions

Expert Solution

6-5

a) Using LIFO

Prepaid Cell Phones
Date Purchases Cost of goodss sold Inventory
Qty Rate Value Qty Rate Value Qty Rate Value
Dec.1    310 $        88 $        27,280
Dec.10               144 $        90 $        12,960    310 $        88 $        27,280
   144 $        90 $        12,960
Dec.12     144 $        90 $        12,960    214 $        88 $        18,832
       96 $        88 $          8,448
Dec.14     166 $        88 $        14,608      48 $        88 $          4,224
Dec.20               240 $        96 $        23,040      48 $        88 $          4,224
   240 $        96 $        23,040
Dec.31     200 $        96 $        19,200      48 $        88 $          4,224
     40 $        96 $          3,840
Dec.31 Balances $        55,216 $          8,064

b)

When the FIFO method used inventory value is higher because of the latest purchases which are in closing inventory purchased at a higher price.

EX-6-6 : Using FIFO

Prepaid Cell Phones
Date Purchases Cost of goodss sold Inventory
Qty Rate Value Qty Rate Value Qty Rate Value
Dec.1    310 $        88 $        27,280
Dec.10               144 $        90 $        12,960    310 $        88 $        27,280
   144 $        90 $        12,960
Dec.12     240 $        88 $        21,120      70 $        88 $          6,160
   144 $        90 $        12,960
Dec.14        70 $        88 $          6,160      48 $        90 $          4,320
       96 $        90 $          8,640
Dec.20               240 $        96 $        23,040      48 $        90 $          4,320
   240 $        96 $        23,040
Dec.31        48 $        90 $          4,320      88 $        96 $          8,448
    152 $        96 $        14,592
Dec.31 Balances $        54,832 $          8,448

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