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?

Q: Expert Answer

(a) To determine Perpetual Inventory System: Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases, and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time. To determine: cost of merchandise sold for each sale and inventory balance after each sale by PC Phones as on December 31. Explanation In Last-in-First-Out method, the costs of last purchased items are considered as the cost of goods sold, for the items which are sold first... (b) To determine To state: if inventory for the preceding data is expected to be higher or lower using first-in-first out method (FIFO).

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Answer 1

BuyFind

Corporate Financial Accounting

14th Edition

Carl Warren + 2 others

Publisher: Cengage Learning

ISBN: 9781305653535

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Answer 2

BuyFind

Corporate Financial Accounting

14th Edition

Carl Warren + 2 others

Publisher: Cengage Learning

ISBN: 9781305653535

Solutions

Chapter

Section

Answer 3

Solutions

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Section

Answer 4

Chapter

Section

Answer 5

(a)

To determine

Perpetual Inventory System:

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases, and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

To determine: cost of merchandise sold for each sale and inventory balance after each sale by PC Phones as on December 31.

Explanation of Solution

In Last-in-First-Out method, the costs of last purchased items are considered as the cost of goods sold, for the items which are sold first...

Answer 6

(b)

To determine

To state: if inventory for the preceding data is expected to be higher or lower using first-in-first out method (FIFO).

Corporate Financial Accounting

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Corporate Financial Accounting

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The Solution to Your Study Problems

Chapter 6 Solutions

Additional Business Textbook Solutions

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