Perpetual Inventory Using FIFO

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

Inventory		Purchases		Sales
May 1	4,000 units at $31	May 10	2,000 units at $33	May 12	2,800 units
		May 20	1,800 units at $35	May 14	2,400 units
				May 31	1,200 units

Assume that the business maintains a perpetual inventory system, costing by the first-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 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 Merchandise Sold Unit Cost column and in the Inventory Unit Cost column.

Schedule of Cost of Merchandise Sold

FIFO Method

Prepaid Cell Phones

Assume that the business maintains a perpetual inventory system, costing by the first-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 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 Merchandise Sold Unit Cost column and in the Inventory Unit Cost column. Schedule of Cost of Merchandise Sold FIFO Method Prepaid Cell Phones Purchases Purchases Unit Purchases Total Cost of Merchandise Sold Date Cost of Merchandise Sold Cost of Merchandise Sold Inventory Inventory Unit Inventory Total Quantity Cost Cost Quantity Unit Cost Total Cost Quantity Cost Cost May 4,000 31 124,000 May 2,000 33 10 66,000 4,000 31 124,000 1 2,000 33 66,000 May 12 2,800 $ 31 86,800 1,200 31 37,200 2,000 33 66,000 May 14 2,400 31 74,400 May 20 O o May 31 Il I. May 31 Balances