## Inventory Accounting Problem### PROBLEM 1Norris Company uses the perpetual inventory system and had the following purchases and sales during March.| Price/Unit | | Purchases | | | Sales | || :-- | :-- | :-- | :-- | :-- | :-- | :-- || Date | | Units | Unit Cost | | Units | Selling Price || 3/1 | Beginning inventory | 100 | $40 | | | || 3/3 | Purchase | 60 | $50 | | | || 3/4 | Sales | | | | 70 | $80 || 3/10 | Purchase | 200 | $55 | | | || 3/16 | Sales | | | | 80 | $90 || 3/19 | Purchase | 40 | $60 | | | || 3/25 | Sales | | | | 120 | $90 |### Instructions:Using the inventory and sales data above, calculate the value assigned to the cost of goods sold in March and to the ending inventory at March 31 using:(a) FIFO (First-In, First-Out)(b) LIFO (Last-In, First-Out)### Explanation of Inventory Accounting Methods:#### FIFO (First-In, First-Out):Under the FIFO method, the oldest inventory items are recorded as sold first. This method assumes that items are sold in the same order that they are added to the inventory. Therefore, the costs associated with the earliest items are used in the cost of goods sold calculation.#### LIFO (Last-In, First-Out):Under the LIFO method, the most recently purchased inventory items are recorded as sold first. This method assumes that items are sold in the reverse order that they were added to the inventory. Therefore, the costs associated with the most recent items are used in the cost of goods sold calculation.### Steps to Solve:1. Calculate the cost of goods sold (COGS) for each sale transaction based on FIFO and LIFO.2. Determine the ending inventory value at March 31 using FIFO and LIFO.**Note:** It is crucial to account for each transaction and how it affects the inventory and cost of goods sold based on the chosen method (FIFO or LIFO).

Name: ## Inventory Accounting Problem### PROBLEM 1Norris Company uses the p
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Description: ## Inventory Accounting Problem### PROBLEM 1Norris Company uses the perpetual inventory system and had the following purchases and sales during March.| Price/Unit | | Purchases | | | Sales | || :-- | :-- | :-- | :-- | :-- | :-- | :-- || Date | | Uni

Lets understand the basics. In FIFO basis company assumes that, goods purchased first are sold…

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PROBLEM 1 Norris Company uses the perpetual inventory system and had the following purchases and sales during March. Purchases Sales Selling Units Unit Cost Units Price/Unit 100 $40 3/1 Beginning inventory 3/3 Purchase 60 $50 3/4 Sales 70 $80 3/10 Purchase 200 $55 3/16 Sales 80 $90 3/19 Purchase 40 $60 3/25 Sales 120 $90 Instructions Using the inventory and sales data above, calculate the value assigned to cost of goods sold in March and to the ending inventory at March 31 using (a) FIFO (b) LIFO

PROBLEM 1 Norris Company uses the perpetual inventory system and had the following purchases and sales during March. Purchases Sales Selling Units Unit Cost Units Price/Unit 100 $40 3/1 Beginning inventory 3/3 Purchase 60 $50 3/4 Sales 70 $80 3/10 Purchase 200 $55 3/16 Sales 80 $90 3/19 Purchase 40 $60 3/25 Sales 120 $90 Instructions Using the inventory and sales data above, calculate the value assigned to cost of goods sold in March and to the ending inventory at March 31 using (a) FIFO (b) LIFO

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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