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**FIFO and LIFO Costs Under Perpetual Inventory System** **Inventory Data:** - **Beginning Inventory:** 21,600 units at $20.00 - **Sale:** 14,400 units at $40.00 - **First Purchase:** 48,000 units at $25.20 - **Sale:** 36,000 units at $40.00 - **Second Purchase:** 45,000 units at $26.40 - **Sale:** 33,000 units at $40.00 The company employs the perpetual inventory system, and by year-end, they have 31,200 units of the product in stock. **Questions:** a. What is the total cost of the ending inventory according to FIFO? b. What is the total cost of the ending inventory according to LIFO? **Feedback Note:** - The exercise uses the perpetual inventory system. In FIFO (First-In, First-Out), the oldest inventory items are sold first. The remaining inventory consists of the latest purchases. Ensure to account for the inventory layers: any unsatisfied part of a sale is to be covered by the earliest applicable layer. No graphs or diagrams are present in the image. The text focuses on calculations and understanding how different inventory methods affect ending inventory values.

**FIFO and LIFO Costs Under Perpetual Inventory System** **Inventory Data:** - **Beginning Inventory:** 21,600 units at $20.00 - **Sale:** 14,400 units at $40.00 - **First Purchase:** 48,000 units at $25.20 - **Sale:** 36,000 units at $40.00 - **Second Purchase:** 45,000 units at $26.40 - **Sale:** 33,000 units at $40.00 The company employs the perpetual inventory system, and by year-end, they have 31,200 units of the product in stock. **Questions:** a. What is the total cost of the ending inventory according to FIFO? b. What is the total cost of the ending inventory according to LIFO? **Feedback Note:** - The exercise uses the perpetual inventory system. In FIFO (First-In, First-Out), the oldest inventory items are sold first. The remaining inventory consists of the latest purchases. Ensure to account for the inventory layers: any unsatisfied part of a sale is to be covered by the earliest applicable layer. No graphs or diagrams are present in the image. The text focuses on calculations and understanding how different inventory methods affect ending inventory values.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**FIFO and LIFO Costs Under Perpetual Inventory System** **Inventory Data:** - **Beginning Inventory:** 21,600 units at $20.00 - **Sale:** 14,400 units at $40.00 - **First Purchase:** 48,000 units at $25.20 - **Sale:** 36,000 units at $40.00 - **Second Purchase:** 45,000 units at $26.40 - **Sale:** 33,000 units at $40.00 The company employs the perpetual inventory system, and by year-end, they have 31,200 units of the product in stock. **Questions:** a. What is the total cost of the ending inventory according to FIFO? b. What is the total cost of the ending inventory according to LIFO? **Feedback Note:** - The exercise uses the perpetual inventory system. In FIFO (First-In, First-Out), the oldest inventory items are sold first. The remaining inventory consists of the latest purchases. Ensure to account for the inventory layers: any unsatisfied part of a sale is to be covered by the earliest applicable layer. No graphs or diagrams are present in the image. The text focuses on calculations and understanding how different inventory methods affect ending inventory values.
Transcribed Image Text:**FIFO and LIFO Costs Under Perpetual Inventory System** **Inventory Data:** - **Beginning Inventory:** 21,600 units at $20.00 - **Sale:** 14,400 units at $40.00 - **First Purchase:** 48,000 units at $25.20 - **Sale:** 36,000 units at $40.00 - **Second Purchase:** 45,000 units at $26.40 - **Sale:** 33,000 units at $40.00 The company employs the perpetual inventory system, and by year-end, they have 31,200 units of the product in stock. **Questions:** a. What is the total cost of the ending inventory according to FIFO? b. What is the total cost of the ending inventory according to LIFO? **Feedback Note:** - The exercise uses the perpetual inventory system. In FIFO (First-In, First-Out), the oldest inventory items are sold first. The remaining inventory consists of the latest purchases. Ensure to account for the inventory layers: any unsatisfied part of a sale is to be covered by the earliest applicable layer. No graphs or diagrams are present in the image. The text focuses on calculations and understanding how different inventory methods affect ending inventory values.
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