Question: Top Line Equipment sells hand held engine analyzers to automotive

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.


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  • CreatedApril 29, 2014
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