Question

Beginning inventory, purchases, and sales data for portable game players are as follows: Apr. 1 Inventory 45 units @ $67 10 Sale 32 units 57 units @ $70 Purchase Sale Sale 20 24 30 32 units 9 units Purchase 35 units @ $73 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.

Answer 1

Ans.	Schedule of Cost of Merchandise Sold
	LIFO Method
	Portable Game Players
	Date	Quantity	Purchases	Purchases	Quantity	COGS	COGS	Inventory	Inventory	Inventory
		Purchased	Unit cost	Total cost	Sold	Unit cost	Total cost	Quantity	Unit cost	Total cost
	1-Apr	45	$67.00	$3,015				45	$67.00	$3,015
	10-Apr				32	$67.00	$2,144	13	$67.00	$871
	15-Apr	57	$70.00	$3,990				13	$67.00	$871
								57	$70.00	$3,990
	20-Apr				32	$70.00	$2,240	13	$67.00	$871
								25	$70.00	$1,750
	24-Apr				9	$70.00	$630	13	$67.00	$871
								16	$70.00	$1,120
	30-Apr	35	$73.00	$2,555				13	$67.00	$871
								16	$70.00	$1,120
								35	$73.00	$2,555
	Total				Cost of goods sold		$5,014	Cost of Ending inventory		$4,546
	*In LIFO method the units that have purchased last, are released the first one and the ending inventory
	units remain from the first purchases.