Question

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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