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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339 Exercise 38
Accounting for inventory using the perpetual system-LIFO, and journalizing inventory transactions
Fit World began January with an inventory of 80 crates of vitamins that cost a total of $4,000. During the month, Fit World purchased and sold merchandise on account as follows:
Fit World uses the LIFO method.
Cash payments on account totaled $5,000. Operating expenses for the month were $3,300, with two-thirds paid in cash, and the rest accrued as Accounts payable.
Requirements
1. Which inventory method most likely mimics the physical flow of Fit World's inventory
2. Prepare a perpetual inventory record, using LIFO cost, for this merchandise.
3. Journalize all transactions using LIFO.
Fit World began January with an inventory of 80 crates of vitamins that cost a total of $4,000. During the month, Fit World purchased and sold merchandise on account as follows:
Fit World uses the LIFO method.
Cash payments on account totaled $5,000. Operating expenses for the month were $3,300, with two-thirds paid in cash, and the rest accrued as Accounts payable.
Requirements
1. Which inventory method most likely mimics the physical flow of Fit World's inventory
2. Prepare a perpetual inventory record, using LIFO cost, for this merchandise.
3. Journalize all transactions using LIFO.
Explanation
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2. A perpetual inventory system is the c...
Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
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