(i) FIFO method. (ii) Specific identification method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Hane Business began in 2021 with an inventory of 100 units that cost $2,000 each.
During January 2021, Hane Business completed these inventory transactions:
Jan 2 Purchase 80 units @ $1,800 each
Jan 5 Sale 60 units
Jan 12 Purchase 120 units @ $1,500 each
Jan 25 Sale 90 units
For the specific identification method, assume that ending inventory is made up of 80
units from Jan 2 purchases and remaining ending inventory units from Jan 12 purchases.
(a) Using the perpetual inventory system, identify and compute the ending inventory
cost and cost of goods sold for January 2021 under:
(i) FIFO method.
(ii) Specific identification method.
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