Question

Required information Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. Also, on December 15, Monson sells 28 units for $25 each. Purchases on December 7 Purchases on December 14 Purchases on December 21 18 units @ $10.00 cost 35 units @ $15.00 cost 28 units @ $18.00 cost Required: Monson uses a perpetual inventory system. Determine the costs assigned to the December 31 ending inventory based on the FA method. Perpetual FIFO: Goods Purchased Cost of Goods Sold Cost Per Cost of Goods Unit Sold Inventory Balance Cost Per Inventory of Units Unit Band Wof Units of Units Date Cost PerG oo Unit Purchased Sold December 7 December December 15

Answer 1

Perpetual FIFO :- Goods purchased Date Units Rate Cost S 07-Dec 18.00 10.00 180.00 Cost of goods sold Units Rate Cost $ Ending inventory Units Rate Costs 18.00 10.00 180.00 14-Dec 35.00 15.00 525.00 18.00 35.00 10.00 15.00 180.00 525.00 15-Dec 18.00 10.00 10.00 15.00 180.00 150.00 25.00 15.00 375.00 21-Dec 28.00 18.00 504.00 25.00 28.00 15.00 18.00 375.00 504.00 Cost of ending inventory is = (375+504) = $ 879/. Perpetual LIFO :- Goods purchased Date - Units Rate Cost $ 07-Dec 18.00 10.00 180.00 Cost of goods sold Units Rate Cost $ Ending inventory Units Rate Cost $ 18.00 10.00 180.00 14-Dec 35.00 15.00 525.00 18.00 35.00 10.00 15.00 180.00 525.00 15-Dec 28.00 15.00 420.00 18.00 7.00 10.00 15.00 180.00 105.00 21-Dec 28.00 18.00 504.00 7.00 28.00 15.00 18.00 105.00 504.00 Cost of ending inventory is = (105+504) = $ 609/.