Comparing Cost of goods sold under FIFO, LIFO, and average cost [5-10 min]Refer to Short E...

Comparing Cost of goods sold under FIFO, LIFO, and average cost [5-10 min]

Refer to Short Exercise through Exercise. After completing those exercises, answer the following questions:

Perpetual inventory record—FIFO [10 min]

Mountain Cycles uses the FIFO inventory method. Mountain started August with 12 bicycles that cost $42 each. On August 16, Mountain bought 40 bicycles at $68 each. On August 31, Mountain sold 36 bicycles.

Requirement

1. Prepare Mountain’s perpetual inventory record.

Journalizing inventory transactions—average cost [5-10 min]

Use the Mountain Cycles data in Short Exercise.

Requirements

1. Journalize the August 16 purchase of inventory on account.

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2. Journalize the August 31 sale of inventory on account. Mountain sold each bicycle for $84.

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3. Journalize the Cost of goods sold under average cost on August 31.

Perpetual inventory record—average cost [10 min]

Review the facts on Mountain Cycles in Short Exercise.

Requirement

1. Prepare a perpetual inventory record for the average-cost method.