erpetual Inventory Using LIFO

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

Inventory		Purchases		Sales
May 1	1,400 units at $28	May 10	700 units at $30	May 12	980 units
		20	630 units at $32	14	840 units
				31	420 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. 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 Prepaid Cell Phones Cost of Cost of Merchandise Merchandise Sold Sold Unit Cost Total Cost Purchases Purchases Quantity Unit Cost Total Cost Sold Inventory Inventory Inventory Quantity Unit Cost Total Cost Quantity Date Purchased May 1 May 10 May 12 May 14 May 20 ml May 31 May 31 Balances b. Based upon the preceding data, would you expect the inventory to be higher or lower using the first-in, first-out method? Higher Lower