The Hat Store had the following series of transactions for Year 2:

Required
a. Determine the quantity and dollar amount of inventory at the end of the year, assuming The Hat Store uses the FIFO cost flow assumption and keeps perpetual records.
b. Write a memo explaining why The Hat Store would have difficulty applying the weighted-average method on a perpetual basis.

Transcribed Image Text:

Description 50 units @ $40 200 units @ $42 170 units @ $95 Date Transaction Beginning inventory Purchased Jan. 1 Mar. 15 May 30 Sold Purchased Sold Aug. 10 Nov. 20 340 units @ $96