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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

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BuyFindarrow_forward

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem
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Perpetual inventory using LIFO

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

Mar. 1 Inventory 270 units at $18
  8 Sale 225 units
  15 Purchase 375 units at $20
  27 Sale 240 units

Assuming a perpetual inventory system and using the Last-in. find-out (LIFO) method, determine (a) the cost of merchandise sold on March 27 and (b) the inventory on March 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 F as on March 31.

Explanation

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

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