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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 LIFO

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

Sept. 1 Inventory 80 units at $175
  10 Sale 65 units
  18 Purchase 75 units at $180
  27 Sale 70 units

Assuming a perpetual inventory system and using the last-in, first-out (LIFO) method, determine (a) the cost of merchandise sold on September 27 and (b) the inventory on September 30.

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 G as on September 30.

Explanation

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

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