Perpetual inventory using LIFO Beginning inventory, purchases, and sales data for prepaid cell phones for December are as follows: Inventory Purchases Sales Dec. 1 310 units at $88 Dec. 10 144 units at $90 Dec. 12 240 units 20 240 units at $96 14 166 units 31 200 units 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?
Corporate Financial Accounting
Corporate Financial Accounting
Solutions
Perpetual inventory using LIFO
Beginning inventory, purchases, and sales data for prepaid cell phones for December are as follows:
| Inventory | Purchases | Sales | |||
| Dec. 1 | 310 units at $88 | Dec. 10 | 144 units at $90 | Dec. 12 | 240 units |
| 20 | 240 units at $96 | 14 | 166 units | ||
| 31 | 200 units | ||||
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?
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