Question

Perpetual Inventory Using LIFO

Beginning inventory, purchases, and sales data for portable game players are as follows:

Apr. 1		Inventory	46 units @ $65
10		Sale	35 units
15		Purchase	57 units @ $68
20		Sale	33 units
24		Sale	8 units
30		Purchase	38 units @ $71

The business maintains a perpetual inventory system, costing by the last-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 4.

Under LIFO, if units are in inventory at two different costs, enter the units with the HIGHER unit cost first in the Cost of Merchandise Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column.

Schedule of Cost of Merchandise Sold
LIFO Method
Portable Game Players
Date	Quantity Purchased	Purchases Unit Cost	Purchases Total Cost	Quantity Sold	Cost of Merchandise Sold Unit Cost	Cost of Merchandise Sold Total Cost	Inventory Quantity	Inventory Unit Cost	Inventory Total Cost
Apr. 1								$	$
Apr. 10					$	$
Apr. 15		$	$
Apr. 20
Apr. 24
Apr. 30
Apr. 30	Balance					$			$

Answer 1

Under LIFO, if units are in inventory at two different costs, enter the units with the HIGHER unit cost first in the Cost of Merchandise Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column.

Schedule of Cost of Merchandise Sold
LIFO Method
Portable Game Players
Date	Quantity Purchased	Purchases Unit Cost	Purchases Total Cost	Quantity Sold	Cost of Merchandise Sold Unit Cost	Cost of Merchandise Sold Total Cost	Inventory Quantity	Inventory Unit Cost	Inventory Total Cost
Apr. 1							46	$65	$2990
Apr. 10				35	$65	$2275	11	65	715
Apr. 15	57	$68	$3876				11	65	715
							57	68	3876
Apr. 20				33	68	2244	11	65	715
							24	68	1632
Apr. 24				8	68	544	11	65	715
							16	68	1088
Apr. 30	38	71	2698				11	65	715
							16	68	1088
							38	71	2698
Apr. 30	Balance					$5063			$4501

Cost of goods sold = $5063

Ending inventory = $4501