Assume that the business in Exercise 7-3 maintains a perpetual inventory system, costing by the last-in, first-out

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Assume that the business in Exercise 7-3 maintains a perpetual inventory system, costing by the last-in, first-out method. Determine the cost of merchandise sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 4.

Exercise 7-3,

Beginning inventory, purchases, and sales data for portable game players are as follows:

Apr. 1 ............. Inventory ............. 120 units at $26

..... 10 ............. Sale ............................. 90 units

..... 15 ............. Purchase .............. 140 units at $28

..... 20 ............. Sale ............................ 110 units

..... 24 ............. Sale .............................. 40 units

..... 30 ......... Purchase ................... 160 units at $30

The business maintains a perpetual inventory system, costing by the first-in, first-out method.

a. Determine the cost of the merchandise sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 3.

b. Based upon the preceding data, would you expect the inventory to be higher or lower using the last-in, first-out method?

Exhibit: 4 Entries and Perpetual Inventory Account (LIFO)

Assume that the business in Exercise 7-3 maintains a perpetual


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Related Book For  answer-question

Accounting

ISBN: 978-1337899451

27th edition

Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac

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