November 1, 2020, 5M Corporation entered into a purchase contract (not subject to revision or cancellation) to
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Question:
November 1, 2020, 5M Corporation entered into a purchase contract (not subject to revision or cancellation) to purchase 500 units of inventory for $50 per unit before January 1, 2021. The company uses the LIFO inventory method.
a. If the inventory has a market price of $40 per unit on November 30, 2020, what entry (if any) does 5M Corporation record?
b. Record the purchase of 500 units on December 15, 2020, if the market price remained at $40 per unit. Assume that the company uses a perpetual inventory system.
Related Book For
Financial Reporting And Analysis
ISBN: 9781260247848
8th Edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
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