Assume the company uses a periodic inventory system.

Refer to P10.4.

Franzen Company uses a perpetual inventory system. During the month of February of the current year, the company experienced the following transfers and sales on one item in the stock of goods. The sale price of the product is $ 6. Assume that all sales are for cash.

Required
A. Make the entries for these transactions using FIFO.
B. Make the entries for these transactions using LIFO.
C. What are the cost of goods sold and the cost of ending inventory under each of these assumptions? Explain why the two methods generate different amounts.

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Number of Units Unit Cost $4.00 $4.10 $4.20 Date Feb. 1 Transaction Beginning inventory Sale Transfer to Finished Goods Sale Transfer to Finished Goods Sale 200 600 500 400 300 15 24 28