Question
Beginning inventory, purchases, and sales data for prepaid cell phones for August are as follows: Inventory Purchases Sales Aug. 1 775 units at $44 Aug.
Beginning inventory, purchases, and sales data for prepaid cell phones for August are
as follows:
Inventory Purchases Sales
Aug. 1 775 units at $44 Aug. 10 360 units at $45 Aug. 12 600 units
20 600 units at $48 14 415 units
31 500 units
a. Assuming that the perpetual inventory system is used, costing by the LIFO 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.
b. Based upon the preceding data, would you expect the inventory to be higher or lower
using the first-in, first-out method?
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