Question

Perpetual Inventory Using FIFO

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

Inventory		Purchases		Sales
Dec. 1	420 units at $27	Dec. 10	210 units at $29	Dec. 12	294 units
		Dec. 20	189 units at $31	Dec. 14	252 units
				Dec. 31	126 units

Assume that the business maintains a perpetual inventory system, costing by the first-in, first-out 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 3. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Goods Sold Unit Cost column and in the Inventory Unit Cost column.

Schedule of Cost of Goods Sold
FIFO Method
Prepaid Cell Phones
Date	Purchases Quantity	Purchases Unit Cost	Purchases Total Cost	Cost of Goods Sold Quantity	Cost of Goods Sold Unit Cost	Cost of Goods Sold Total Cost	Inventory Quantity	Inventory Unit Cost	Inventory Total Cost
Dec. 1								$	$
Dec. 10		$	$
Dec. 12					$	$
Dec. 14
Dec. 20
Dec. 31
Dec. 31	Balances

Answer 1

Solution:

Schedule of Cost of Goods Sold
FIFO Method
Prepaid Cell Phones
Date	Purchases Quantity	Purchases Unit Cost	Purchases Total Cost	Cost of Goods Sold Quantity	Cost of Goods Sold Unit Cost	Cost of Goods Sold Total Cost	Inventory Quantity	Inventory Unit Cost	Inventory Total Cost
Dec. 1							420	$27.00	$11,340.00
Dec. 10	210	$29.00	$6,090.00				420	$27.00	$11,340.00
							210	$29.00	$6,090.00
Dec. 12				294	$27.00	$7,938.00	126	$27.00	$3,402.00
							210	$29.00	$6,090.00
Dec. 14				126	$27.00	$3,402.00	84	$29.00	$2,436.00
				126	$29.00	$3,654.00
Dec. 20	189	$31.00	$5,859.00				84	$29.00	$2,436.00
							189	$31.00	$5,859.00
Dec. 31				84	$29.00	$2,436.00	147	$31.00	$4,557.00
				42	$31.00	$1,302.00
Dec. 31	Balances					$18,732.00	147		$4,557.00