## Educational Website Example### Required InformationTrey Monson starts a merchandising business on December 1 and engages in the following three inventory purchases. On December 15, Monson sells 30 units for $35 each.- **Purchases on December 7:** 20 units at $14.00 cost- **Purchases on December 14:** 36 units at $21.00 cost- **Purchases on December 21:** 30 units at $25.00 cost### TaskMonson sells 30 units for $35 each on December 15. Monson uses a perpetual inventory system. Determine the costs assigned to the December 31 ending inventory when costs are assigned based on LIFO (Last In, First Out).### Perpetual LIFO Inventory TableThe table is divided into three main sections: Goods Purchased, Cost of Goods Sold, and Inventory Balance, each further divided into columns:1. **Date** – The date of each transaction.2. **Goods Purchased**: - **# of units** – Number of units purchased. - **Cost per unit** – Cost of each unit. - **Cost of Goods Available for Sale** – Total cost of goods available before sales.3. **Cost of Goods Sold**: - **# of units sold** – Number of units sold. - **Cost per unit** – Cost of each unit sold. - **Cost of Goods Sold** – Total cost of units sold.4. **Inventory Balance**: - **# of units** – Remaining units in inventory. - **Cost per unit** – Cost of remaining inventory units. - **Inventory Balance** – Total value of remaining inventory.**Transaction Details (Illustrated in Table):**- **December 7:** - 20 units purchased at $14.00 each. - **December 14:** - 36 units purchased at $21.00 each. - **December 15:** - 30 units sold at $35 each. The cost of the 30 units sold is calculated using LIFO; hence, the most recently purchased units (36 units at $21.00) are sold first. - **December 21:** - 30 units purchased at $25.00 each.### Understanding LIFO in a Perpetual Inventory SystemUsing the LIFO method, when sales occur

Under LIFO method, the inventory purchased last is sold first. What comes in last, goes out first.…

Answered: Required: Monson sells 30 units for $35…

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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A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 310 units. Ending inventory at January 31 totals 130 units. Units Unit Cost Beginning inventory on January 1 280 $ 2.60 Purchase on January 9 60 2.80 Purchase on January 25 100 2.94 Required:Assume the perpetual inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on LIFO.
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Required:Determine the costs assigned to the December 31 ending inventory based on the FIFO method.

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Required: Monson sells 30 units for $35 each on December 15. Monson uses a perpetual inventory system. Determine the costs assigned the December 31 ending Inventory when costs are assigned based on LIFO.