Explanation Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time. First-in-First-Out ( FIFO): In this method, items purchased initially are sold first. So, the value of the ending inventory consist the recent cost for the remaining unsold items. Calculate the cost of ending inventory and cost of goods sold under FIFO by using perpetual inventory system as follows: Figure (1) Working notes: Calculate the amount of ending inventory under FIFO: Date Particulars Units Unit cost($) Total cost($) (a) (b) ( c = a × b )

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ISBN: 9781259864230

Author: PHILLIPS, Fred, Libby, Robert, Patricia A.

Publisher: Mcgraw-hill Education,

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Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in…

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6. a physical count of merchandise inventory on July 31 reveals that there are 30 units on hand. Using thr FIFO inventory method, the amount allocated to cost of goods sold for July is?

M7-19 (Supplement 7A) Calculating Cost of Goods Sold and Ending Inventory under FIFO and LIFO (Perpetual Inventory) [LO 7-S1] Aircard Corporation tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period as if it uses a perpetual inventory system. The following are the transactions for the month of July. Units Unit Cost July 1 Beginning Inventory 2,700 $ 47 July 5 Sold 1,350 July 13 Purchased 6,700 51 July 17 Sold 3,700 July 25 Purchased 8,700 57 July 27 Sold 5,700 Calculate the cost of ending inventory and cost of goods sold assuming a perpetual inventory system is used in combination with (a) FIFO and (b) LIFO.

< 1. Determine the Inventory on March 31 and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system. Inventory, March 31 s 1,010,625 X Cost of goods sold s 10,891,875 X 2. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system. Inventory, March 31 s Cost of goods sold 881,259 X 10,921,525 X 3. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system. Round the weighted average unit cost to the nearest cent. Inventory, March 31 s Cost of goods sold s 4. Compare the gross profit and the March 31 inventories, using the following column headings. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Sales Cost of goods sold Gross profit Inventory, March 31 FIFO LIFO Weighted…

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