Top Line Equipment sells hand held engine analyzers to automotive service shops. Top Line Equipment started November with an inventory of 95 units that cost a total of $11,400. During the month, Top Line Equipment purchased and sold merchandise on account as follows:

Nov 6 Purchased 105 units @ $134

13 Sold 100 units @ $280

19 Purchased 150 units @ $136

25 Sold 110 units @ $280

29 Sold 105 units @ $280

Top Line Equipment uses the LIFO method. Cash payments on account totaled $16,300. Operating expenses for the month were $9,000, with two-thirds paid in cash and the rest accrued as Accounts Payable.

Requirements

1. Which inventory method (excluding specific-unit) most likely mimics the physical flow of Top Line 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 November 30.