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Base your answers to questions 2 and 3 on the following information. The following purchases and sales of item L211 were made by the Davis Supply Store during 20x1. On January 1, 20X1, the inventory of this item was 300 units at a of $75. Purchases Units Sold Units 200 Cost $16,000 Date February 2 February 10 March 22 March 27 May 3 May 19 June 27 July 15 August 14 120 85 190 14,820 175 50 210 100 200 16,200 150 12,300 September 3 September 4 November 10 December 6 25 200 16,600 150 inventory method, complete the perpetual inventory REQUIRED: Using the FIFO control record at the back of this unit and then answer question 2. Note that the January 1 balance and the Februar the record. y 2 and 10 transactions have been filled in on 2. The inventory balance at December 31, 20x1, under the FIFO method is comprised of A. 25 units purchased at $80 and 300 units purchased at $75. B. 125 units purchased at $82 and 200 units purchased at $83. C. 200 units purchased at $82 and 125 units purchased at $83. D. 325 units purchased at $83. 3. Assume that the Davis Supply Store uses the periodic inventory system. The ending inventory balance at December 31, 20X1, under the LIFO inventory method would b comprised of A. 200 units purchased at $83 and 125 units purchased at $81 B. 325 units purchased at $83. C. 325 units purchased at $75. D. 300 units purchased at $75 and 25 units purchased at $80.

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FIFO Quantity Rate Cost Opening Balance Purchase sold 300 75.00 22,500 200 80.00 16,000 (205) $ 75.00 (15,375) Purchase sold sold Purchase Sold sold Purchase sold sold Purchase Sold Sold Balance 190 78.00 14,820 (95) 75.00 (7,125) (130) 80.00 (10,400) 200 81.00 16,200 (70) 80.00 (5,600 (140) 78.00 (10,920) 150 82.00 12,300 (50) $ 78.00 (3,900) (75) 81.00 (6,075) 200 83.00 16,600 (125) 81.00 (10,125) (25) $ 82.00 (2,050) 200 83.00 16,600 125 82.00 10,250 325 Cost of Ending Inventory 26,850

Under Perpetual & periodic method Cost of ending inventory under periodic-FIFO Ending Inventory Most recent cost Nov 10 purchases Next most recent purchase Aug 14 purchase Ending Inventory Answer: Option B:: 125 units purchased at $82 and 200 units purchased at $83 325 Units Rate Cost 200 83 16,600 125 325 10,250 26,850 82 Under periodic method Cost of ending inventory under periodic-LIFO Ending Inventory Earliest Cost From Opening Balance From first earliest purchase Ending Inventory Answer: Option D: 300 units purchased at $75 and 25 units purchased at $80 325 Units Rate Cost 300 25 325 75 22,500 2,000 24,500 80

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