Perpetual Inventory Record

Topics: FIFO and LIFO accounting, Inventory, Revenue Pages: 2 (441 words) Published: May 21, 2013
A 25th Century Electronic Center began December with 94 units of inventory that cost $72 each. During December, the store made the following purchases: 12/3: 20 @ 77
12/12: 52 @ 79
12/18: 79 @ 82
25th Century uses the periodic inventory system, and the physical count at December 31 indicates that 112 units of inventory are on hand. Requirements:
1. Determine the ending inventory and cost-of-goods-sold amounts for the December financial statements under the average cost, FIFO, and LIFO methods. 2. Sales revenue for December totaled $23,000. Compute 25th Century’s gross profit for December under each method. 3. Which method will result in the lowest income taxes for 25th Century? Why? Which method will result in the highest net income for 25th Century? Why? -------------------------------------------------

Measuring and journalizing inventory and cost of goods sold in a perpetual system—FIFO [20–25 min] Putter’s Paradise carries an inventory of putters and other golf clubs. Putter’s Paradise uses the FIFO method and a perpetual inventory system. The sales price of each putter is $135. Company records indicate the following for a particular line of Putter’s Paradise putters: Date| Item| Quantity| Unit Cost|

Sep 1| Balance| 5| $61|
6| Sale| 3| |
8| Purchase| 10| 66|
17| Sale| 4| |
30| Sale| 2| |

1. Prepare a perpetual inventory record for the putters. Then determine the amounts Putter’s Paradise should report for ending inventory and cost of goods sold using the FIFO method. -------------------------------------------------

2. Journalize Putter’s Paradise inventory transactions using the FIFO method.

Measuring ending inventory and cost of goods sold in a perpetual system—LIFO [20–25 min] Refer to the Putter’s Paradise inventory data in Exercise 15. Assume that Putter’s Paradise uses the perpetual LIFO cost method. Requirements:

1. Prepare Putter’s Paradise perpetual inventory...
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