Kinser Equipment sells hand-held engine analyzers to automotive service shops. Kinser Equipment started April with an inventory of 125 units that cost a total of $19,250. During the month, Kinser Equipment purchased and sold merchandise on account as follows:
Apr 6 Purchased 65 units @ $160
13 Sold 50 units @ $300
19 Purchased 90 units @ $164
25 Sold 50 units @ $300
29 Sold 105 units @ $300
Kinser Equipment uses the LIFO method. Cash payments on account totaled $17,500. Operating expenses for the month were $13,500, with two-thirds paid in cash and the rest accrued as Accounts Payable.
1. Which inventory method (excluding specific-unit) most likely mimics the physical flow of Kinser Equipment’s inventory?
2. Prepare a perpetual inventory record, using LIFO cost, for this merchandise.
3. Journalize all transactions using LIFO. Record the payments on account and the operating expenses on April 30.