Question

Beginning Inventory, purchases, and sales data for prepaid cell phones for May are as follows: Inventory May 1 Sales May 12 3 Purchases May 10 May 20 ,500 units at $39 1 2,450 units ,750 units at $41 1,575 units at $43 May 14 2,100 units May 31 1,050 units Assume that the business maintains a perpetual inventory system, costing by the first-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 3. Under FIFO, units are in inventory at two different costs, enter the units with the LOWER unit cost first in the cost of Merchandise Sold Unit Cost column and in the Inventory Unit Cost column Schedule of Cost of Merchandise Sold FIFO Method Prepaid Cell Phones Purchases Purchase Purchases Cost of Merchandise Sold Cost of Merchandise Sold cost of Merchandise Sold Inventory Inventory Unit Inventory Total wade Quantity Unit Cost Quantity Unit Cost Total Cost Qulll lll I Balances

Answer 1

Schedule of Cost of Mercaandise Sold
FIFO Method
Prepaid Cell Phones
Date	Purchase Quantity (a)	Purchase Unit Cost (b)	Purchases Total Cost (a*b)	Cost of Merchandise Sold Quantity (c )	Cost of Merchandise Sold Unit Cost (d)	Cost of Merchandise Sold Total Cost (c*d)	Inventory Quantity (e)	Inventory Unit Cost (f)	Inventory Total Cost (e*f)
May. 1							3,500	$39	$136,500
May. 10	1,750	$41	$71,750				3,500	$39	$136,500
							1,750	$41	$71,750
May. 12				2,450	$39	$95,550	1,050	$39	$40,950
							1,750	$41	$71,750
May. 14				1,050	$39	$40,950
				1,050	$41	$43,050	700	$41	$28,700
May. 20	1,575	$43	$67,725				700	$41	$28,700
							1,575	$43	$67,725
May. 31				700	$41	$28,700
				350	$43	$15,050	1,225	$43	$52,675
May. 31						$223,300			$52,675