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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Perpetual inventory using FIFO

Beginning inventory, purchases, and sales for Item Delta are as follows:

July 1 Inventory 50 units at $15
  7 Sale 44 units
  15 Purchase 90 units at $18
  24 Sale 40 units

Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine (a) the cost of merchandise sold on July 24 and (b) the inventory on July 31.

To determine

 (a) & (b)

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.

To determine: cost of merchandise sold and ending inventory of Item D as on July 31.

Explanation

In First-in-First-Out method, the costs of the initially purchased items are considered as ...

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