Trekking Company markets a climbing kit and uses a perpetual inventory system to account for its merchandise.The beginning balance of the inventory and transactions during January were as follows: If the ending inventory is valued at $357,what inventory cost flow assumption was used?

Question

Trekking Company markets a climbing kit and uses a perpetual inventory system to account for its merchandise.The beginning balance of the inventory and transactions during January were as follows:  If the ending inventory is valued at $357,what inventory cost flow assumption was used?

Quizplus · Accepted Answer

Since Trekking Company uses a perpetual inventory system, the cost flow assumption used would be FIFO (first-in, first-out) as the items sold would be assumed to be the oldest items in stock. The ending inventory's value of $357 indicates that the cost of the remaining items in stock were based on the most recent purchases, consistent with FIFO.

Trekking Company Markets a Climbing Kit and Uses a Perpetual