Question: Anderson s Department Store has the following data for inventory purchases

Anderson’s Department Store has the following data for inventory, purchases, and sales of mer-
chandise for December:
Anderson’s uses a perpetual inventory system. All purchases and sales were for cash.
Required:
1. Compute cost of goods sold and the cost of ending inventory using FIFO.
2. Compute cost of goods sold and the cost of ending inventory using LIFO.
3. Compute cost of goods sold and the cost of ending inventory using the average cost method.
4. Prepare the journal entries to record these transactions assuming Anderson chooses to use the FIFO method.
5. Which method would result in the lowest amount paid for taxes?

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  • CreatedSeptember 22, 2015
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