Mogul Processing maintains its internal inventory records using average cost under a perpetual inventory system. The following information relates to its inventory during the year: January 1 Beginning inventory-80,000 units. February 14 Purchased 120,000 units for $4.50 each. March 5 Sold 150,000 units for $14.00 each. August 27 Purchased 50,000 units for $4.80 each. September 12 Sold 60,000 units for $14.00 each. November 15 Purchased 70,000 units for $4.90 each. December 31 Ending inventory 110,000 units. Required: 1. Determine the amount Mogul would calculate internally for ending inventory and cost of goods sold using average cost under perpetual inventory system. Beginning inventory under average cost was 80,000 units with a average cost of $4.25 each. 2. Determine the amount Mogul would report externally for ending inventory and cost of goods sold using last-in, first-out (LIFO) under a periodic inventory system. Beginning inventory under LIFO was 80,000 units with a cost of $4.00 each. 3. Determine the amount Mogul would report for its LIFO reserve at the end of the year. 4. Record the year-end adjusting entry for the LIFO reserve. The balance of the LIFO reserve at the beginning of the year was $20,000. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Record the year-end adjusting entry for the LIFO reserve. The balance of the LIFO reserve at the beginning of the year was $20,000. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. No Event General Journal 1 1 Cost of goods sold LIFO reserve Debit Credit
Mogul Processing maintains its internal inventory records using average cost under a perpetual inventory system. The following information relates to its inventory during the year: January 1 Beginning inventory-80,000 units. February 14 Purchased 120,000 units for $4.50 each. March 5 Sold 150,000 units for $14.00 each. August 27 Purchased 50,000 units for $4.80 each. September 12 Sold 60,000 units for $14.00 each. November 15 Purchased 70,000 units for $4.90 each. December 31 Ending inventory 110,000 units. Required: 1. Determine the amount Mogul would calculate internally for ending inventory and cost of goods sold using average cost under perpetual inventory system. Beginning inventory under average cost was 80,000 units with a average cost of $4.25 each. 2. Determine the amount Mogul would report externally for ending inventory and cost of goods sold using last-in, first-out (LIFO) under a periodic inventory system. Beginning inventory under LIFO was 80,000 units with a cost of $4.00 each. 3. Determine the amount Mogul would report for its LIFO reserve at the end of the year. 4. Record the year-end adjusting entry for the LIFO reserve. The balance of the LIFO reserve at the beginning of the year was $20,000. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Record the year-end adjusting entry for the LIFO reserve. The balance of the LIFO reserve at the beginning of the year was $20,000. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. No Event General Journal 1 1 Cost of goods sold LIFO reserve Debit Credit
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Mogul Processing maintains its internal inventory records using average cost under a perpetual inventory system. The following
information relates to its inventory during the year:
January 1 Beginning inventory-80,000 units.
February 14 Purchased 120,000 units for $4.50 each.
March 5 Sold 150,000 units for $14.00 each.
August 27 Purchased 50,000 units for $4.80 each.
September 12 Sold 60,000 units for $14.00 each.
November 15 Purchased 70,000 units for $4.90 each.
December 31 Ending inventory 110,000 units.
Required:
1. Determine the amount Mogul would calculate internally for ending inventory and cost of goods sold using average cost under a
perpetual inventory system. Beginning inventory under average cost was 80,000 units with a average cost of $4.25 each.
2. Determine the amount Mogul would report externally for ending inventory and cost of goods sold using last-in, first-out (LIFO)
under a periodic inventory system. Beginning inventory under LIFO was 80,000 units with a cost of $4.00 each.
3. Determine the amount Mogul would report for its LIFO reserve at the end of the year.
4. Record the year-end adjusting entry for the LIFO reserve. The balance of the LIFO reserve at the beginning of the year was
$20,000.
× Answer is not complete.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3 Required 4
Record the year-end adjusting entry for the LIFO reserve. The balance of the LIFO reserve at the beginning of the year was
$20,000.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
No
Event
General Journal
1
1
Cost of goods sold
LIFO reserve
Debit
Credit
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Step 1: Introduction to Inventory valuation method
VIEWStep 2: Part 1 preparation of Inventory statement using weighted average
VIEWStep 3: Part 2 preparation of Inventory statement using LIFO
VIEWStep 4: Part 3 Determine the amount of the LIFO Reserve at the end of the year.
VIEWStep 5: Part 4 Prepare the year-end adjusting journal entry to record the LIFO reserve.
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