Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. Monson uses a perpetual inventory system. Also, on December 15, Monson sells 15 units for $29 each. Purchases on December 7 Purchases on December 14 Purchases on December 21 10 units @ $15.00 cost 20 units @ $21.00 cost 15 units @ $23.00 cost

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Trey Monson starts a merchandising business on December 1 and enters into the following three
inventory purchases. Monson uses a perpetual inventory system. Also, on December 15, Monson sells 15
units for $29 each.
Purchases on December 7
Purchases on December 14
Purchases on December 21
Determine the costs assigned to ending inventory when costs are assigned based on the LIFO method.
Date
December 7
December 14
Total December 14
December 15
Totals
Total December 15
December 21
10 units @ $15.00 cost
20 units @ $21.00 cost
15 units @ $23.00 cost
Goods purchased
# of units
Cost per
unit
Cost of Goods
Available for
Sale
Perpetual LIFO:
# of
units
sold
Cost of Goods Sold
Cost per Cost of Goods
unit
Sold
Inventory Balance
Cost per
unit
# of units
Inventory
Balance
Transcribed Image Text:Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. Monson uses a perpetual inventory system. Also, on December 15, Monson sells 15 units for $29 each. Purchases on December 7 Purchases on December 14 Purchases on December 21 Determine the costs assigned to ending inventory when costs are assigned based on the LIFO method. Date December 7 December 14 Total December 14 December 15 Totals Total December 15 December 21 10 units @ $15.00 cost 20 units @ $21.00 cost 15 units @ $23.00 cost Goods purchased # of units Cost per unit Cost of Goods Available for Sale Perpetual LIFO: # of units sold Cost of Goods Sold Cost per Cost of Goods unit Sold Inventory Balance Cost per unit # of units Inventory Balance
Expert Solution
Step 1

LIFO states that the inventory purchased first would be sold last by the company. Whereas, FIFO states that the inventory purchased first would be sold first.

 

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