Question

Perpetual Inventory Using LIFO Beginning inventory, purchases, and sales data for DVD players are as follows: November 1 Inventory 73 units at $99 10 Sale 48 units 15 Purchase 93 units at $105 20 Sale 53 units 24 Sale 13 units 30 Purchase 27 units at $111 The business maintains a perpetual inventory system, costing by the last-in, first-out method. Determine the cost of goods sold 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 Goods Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column. Schedule of Cost of Goods Sold LIFO Method DVD Players

Answer 1

Using the LIFO method, we calculate COGS for each sale date by using the most recent inventory costs first. The total COGS for Nov 10 is $4752, Nov 20 is $5565, and Nov 24 is $1365. Remaining inventory is updated after each transaction, with the most recent purchase prices used first.

Step-by-step explanation:

Perpetual Inventory Using LIFO

When applying the Last-In, First-Out (LIFO) method in a perpetual inventory system, the most recent inventory costs are used first when calculating the cost of goods sold (COGS). Let's determine the COGS for each sale and the ending inventory balance after each sale:

November 10 Sale of 48 units: We have only the beginning inventory, so all 48 units at $99 are sold, totaling $4752 in COGS.

November 20 Sale of 53 units: We have 25 units left from the beginning inventory at $99 and we sold 28 units from the new purchase at $105, totaling $2625 (25 units x $99) + $2940 (28 units x $105) = $5565 in COGS.

November 24 Sale of 13 units: All 13 units are from the new purchase at $105, totaling $1365 in COGS.

The remaining inventory after each sale would be calculated by deducting the COGS from the total inventory available before the sale. After the sales on November 10, 20, and 24, and the purchase on November 15, the balance is 73 units - 48 units sold + 93 units purchased - 53 units sold - 13 units sold = 52 units at $105. When the additional 27 units are purchased on November 30 at $111, the inventory balance will include these new units at the higher price, with the older inventory listed thereafter.

Learn more about LIFO Inventory Calculation here:

Answer 2

Sale - November 10

Cost of Sales

= 48 units × $99

= $4,752

Inventory Balance

=25 units × $99

=$2,475

Sale - November 15

Cost of Sales

=53 units × $105

= $5,565

Inventory Balance

40 units × $105 = $4,200

25 units × $99 = $ 2,475

Total = $6,675

Sale - November 24

Cost of Sales

= 13 units × $105

= $ 1,365

Inventory Balance

27 units × $105 = $ 2,835

25 units × $99 = $ 2,475

Total = $5,310

Step-by-step explanation:

LIFO Inventory System sells the Recently Acquired Inventory First followed By Older Inventory Acquired.