Question: The following details were extracted on November 30 2014 from

The following details were extracted on November 30, 2014, from the records of Seema Company for a specific product:
On December 21, 2014, Seema sold 200 units to a customer at $ 18 per unit. Assume that the company uses a periodic inventory system and that its fiscal year ends on December 31, 2014.
1. Which inventory costing method does Seema use? Explain.
2. Prepare the journal entries to record the purchase transaction on August 20 and the sale transaction on December 21, assuming that both are cash transactions.
3. Compute the inventory turnover ratio during 2014, and briefly explain what the amount means.
4. Assume that the demand for this product slowed down during December 2014, and its net realizable value dropped to $ 9.5 per unit at December 31, 2014. Seema reports its ending inventory at the LCNRV. Prepare the journal entry that should be recorded at December 31, 2014.
5. Compute the cost of sales for 2014, assuming for this part only that Seema uses a perpetual inventory system and the weighted- average cost method.

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