Fit World began January with an inventory of 80 crates of vitamins that cost a total of $4,000. During the month, Fit World purchased and sold merchandise on account as follows:
Purchase 1 . . . . . . . . 140 crates @ $ 55
Sale 1 . . . . . . . . . . . . 160 crates @ $ 100
Purchase 2 . . . . . . . . 160 crates @ $ 60
Sale 2 . . . . . . . . . . . . 170 crates @ $ 110
Fit World uses the LIFO method.
Cash payments on account totaled $5,000. Operating expenses for the month were $3,300, with two-thirds paid in cash, and the rest accrued as Accounts payable.
Requirements
1. Which inventory method most likely mimics the physical flow of Fit World’s inventory?
2. Prepare a perpetual inventory record, using LIFO cost, for this merchandise.
3. Journalize all transactions using LIFO.