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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

PERPETUAL: LIFO AND MOVING-AVERAGE Kelley Company began business on January 1, 20-1. Purchases and sales during the month of January follow.

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REQUIRED

Calculate the total amount to be assigned to cost of goods sold for January and the ending inventory on January 31, under each of the following methods:

  1. 1. Perpetual LIFO inventory method.
  2. 2. Perpetual moving-average inventory method.

1.

To determine

Calculate the total amount assigned to cost of goods sold and the ending inventory balance on January 31, using LIFO costing method - Perpetual inventory system.

Explanation

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Last-in-Last-Out: In Last-in-First-Out method, the costs of last purchased items are considered as the cost of goods sold, for the items which are sold first. The value of the closing stock consists of the initial purchased items...

2.

To determine

Calculate the total amount assigned to cost of goods sold and the ending inventory balance on January 31, using moving-average costing method - Perpetual inventory system.

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