Chapter 6, Problem 6.17E

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 Last-in-First-Out method, the cost of last purchased items are sold first. The value of the closing stock consists the initial purchased items.

To prepare: a perpetual inventory schedule using LIFO method of inventory costing to determine the cost of ending inventory and cost of goods sold for the month.

2.

To determine

To journalize: the inventory transactions using the LIFO method.