Question

Prepare the perpetual inventory schedule for the above transactions using LIFO. Product E2-D2 date purchases cost of goods sold balance May 7 585 585 260 June 1 325 July 28 740 480 Aug. 27 Assistance.

A) FIFO Inventory Schedule
B) Weighted Average Inventory Schedule
C) LIFO Inventory Schedule
D) Specific Identification Inventory Schedule

Answer 1

To prepare the perpetual inventory schedule using LIFO, we start with the beginning inventory on May 7. Purchases are added chronologically, and inventory sold is deducted from the most recent purchases first. Additional data is needed to complete the schedule and calculate the ending balance.

Step-by-step explanation:

To prepare the perpetual inventory schedule for the above transactions using LIFO (Last-in, First-out), we can see that there are various dates with purchases and cost of goods sold information. On May 7, there is a beginning balance of 585 units at $260 each. By June 1, there are no additional purchases, so the balance remains the same. On July 28, another purchase is made of 740 units at $480 each. Finally, on August 27, we would be selling inventory; using LIFO, we'd be selling the most recently acquired inventory first.

Let's detail the LIFO schedule:

• May 7: Begin with 585 units at $260 - total $152,100 (beginning inventory).
• June 1: No activity, inventory remains 585 units at $260.
• July 28: Purchase an additional 740 units at $480 - total $355,200.
• Aug. 27: Sell inventory (we don't have the sold quantity, so we'll need that to calculate COGS).

Without the quantity sold on August 27, we cannot finish preparing the perpetual inventory schedule and calculating the balance. We need additional data to compute cost of goods sold and update the ending balance using LIFO.