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Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

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BuyFindarrow_forward

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
Chapter 6, Problem 3BE
Textbook Problem
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Perpetual inventory using LIFO

Beginning inventory, purchases, and sales for Item 88-HX are as follows:

Chapter 6, Problem 3BE, Perpetual inventory using LIFO Beginning inventory, purchases, and sales for Item 88-HX are as

Assuming a perpetual inventory system and using the last-in, first-out (LIFO) method, determine (a) the cost of goods sold on July 27 and (b) the inventory on July 31.

To determine

Determine the following using last-in, first-out:

a) Cost of goods sold.

b) Ending inventory.

Explanation of Solution

Perpetual Inventory System:

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-First-Out (LIFO): In this method, items purchased recently are sold first. So, the value of the ending inventory consist the initial cost for the remaining unsold items.

Calculate the cost of goods sold and ending inventory.

DatePurchasesCost of goods soldEnding inventory
Quantity (units)Unit costTotal costQuantity (units)Unit costTotal costQuantity (units)Unit costTot...

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Chapter 6 Solutions

Financial And Managerial Accounting
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