Question

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WURER LIROL P6-29A Accounting for inventory using the perpetual inventory system- FIFO, LIFO, and weighted average, and comparing FIFO, LIFO, and weighted average Steel Mill began August with 50 units of iron inventory that cost $35 each. During August, the company completed the following inventory transactions: Units Unit Cost Unit Sales Price 585 $ 54 Aug. 3 8 21 30 Sale Purchase Sale Purchase 88 Requirements 1. Prepare a perpetual inventory record for the merchandise inventory using the FIFO inventory costing method. 2. Prepare a perpetual inventory record for the merchandise inventory using the LIFO inventory costing method.

Answer 1

Answer:- u Perpetual - FIFO melhod - I ending inventorn I cost of goods sold Purchase per Units um 1. Lost - Date Units per 1. unit Units unit 1 50 $35 $1750 Aug 1 s $35 $175 45 $35 1575 Aug 3 $175 $35 Aug 8 | 90 $54 $54 4660 175 S40 10 SY Aug 21 1 80 su 4320 $18 Aug 30 15 10 is $6070 / 25 18 540 270 $810 Total - Ending inventon = $810 & perpetual- LIFO melhod;- I purchases cost of good, sold Units per unit Units perunit I I Ending inventory Units perunit Date cost cost $35 Au91 $1750 175 I 45 $35 1575 5 Aug 3 Augg 90 tsu $54 - $35 $35 54 35 85 54 90 s 4990 Augal hluhu 175 4860 175 270 175 270 Aug 30s 270 Total $6165 125 $715 $ 715 Ending 'muentony = a

3) Perpetual- weighted average costi- cost of goods sold units per cost Purchases Data Unils perunit Aug 1 Aug 3 Aug 8 | 90 $54 T 45 $35 1575 I ending inventory | Units perunit cost I so $35 $1750 5 $35 175 5 35 175 по ч Ч&&o 95 $53 5035 $53 530 - 85 $53 4505 49 #1 53 530 Aug 30 is 10 15 - $18 18 270 $ 800 $ 6080 Total Ending inventony = $ 800 41 cost of goods sold for FIFO melhod = $ 6070 cost of goods sold for lito method= $6165 cost of goods sold for weighted average = $6080 is sales organet (45x $85) +(85* $85) = $11.305 sold. sales - cost of goodly .. Gloss poht = For Fico method; Gross profit 2 $11305- $6070 = $5235 for Lifo method, Grass profit = $ 113050 : $5140 For weighted average, Gross profit : $" - $5125 hers wants to maximize gross proht, the company would Select the FIFO melody because it hay high Gross profiles EX , Gross profit : $ 11305- $ 6080 as high Gross proft le$5235.