i. Determine the cost assigned to the ending inventory by using FIFO method of inventory valuation ii. Determine the cost assigned to the ending inventory by using the weighted Average method of inventory valuation Persia Company reported the following purchases and sales for its only product. Persia uses a perpetual inventory system.Units Acquired at Cost150 units @ $10.00DateActivitiesUnits Sold at RetailMay 1 Beginning Inventory5Purchase220 units @ S12.0010Sales140 units @ $20.0015Purchase100 units @ $13.0024Sales150 units@ $21.00Required:

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Description: i. Determine the cost assigned to the ending inventory by using FIFO method of inventory valuation ii. Determine the cost assigned to the ending inventory by using the weighted Average method of inventory valuation Persia Company reported the followi

LIFO means last in first out where as FIFO means first in first out. Inventory and cost of goods…

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i. Determine the cost assigned to the ending inventory by using FIFO method of inventory valuation ii. Determine the cost assigned to the ending inventory by using the weighted Average method of inventory valuation

i. Determine the cost assigned to the ending inventory by using FIFO method of inventory valuation ii. Determine the cost assigned to the ending inventory by using the weighted Average method of inventory valuation

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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Concept explainers

Inventory Valuation

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 the market with the motive of earning profit.

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i. Determine the cost assigned to the ending inventory by using FIFO method of inventory valuation
ii. Determine the cost assigned to the ending inventory by using the weighted Average method of inventory valuation

Persia Company reported the following purchases and sales for its only product. Persia uses a perpetual inventory system.
Units Acquired at Cost
150 units @ $10.00
Date
Activities
Units Sold at Retail
May 1 Beginning Inventory
5
Purchase
220 units @ S12.00
10
Sales
140 units @ $20.00
15
Purchase
100 units @ $13.00
24
Sales
150 units@ $21.00
Required:

Definition Definition Accounting practice that allows a business to determine the monetary value of any unsold inventory.

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Required: 1. Complete the applicable inventory record card, and calculate cost of goods sold and the cost of ending inventory under each of the following inventory cost flow assumptions: a. FIFO b. LIFO c. Specific identification d. Weighted average. 2. Prepare the journal entries required to record purchases and sales using the FIFO inventory cost flow assumption. Descriptions are not necessary.…
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