Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time. In First-in-First-Out method, the cost of initial purchased items are sold first. The value of the ending inventory consists the recent purchased items. The cost of goods sold, ending merchandise inventory and gross profit under FIFO method using perpetual inventory system.

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Chapter 6, Problem 39CP

1.

To determine

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

In First-in-First-Out method, the cost of initial purchased items are sold first. The value of the ending inventory consists the recent purchased items.

The cost of goods sold, ending merchandise inventory and gross profit under FIFO method using perpetual inventory system.

(2)

To determine

To Prepare: A summary for the month in both units and dollars.

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