Chapter 6, Problem 6.3SE

(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.

Specific Identification: Specific identification method can be said as identifying the items precisely which are being sold and those which are being stored as closing inventory. The companies are required to keep perfect records of the original cost of each and every individual items of the inventory.

To Prepare: The perpetual inventory record under specific identification method.

(2)

To determine

To Record: The entries of merchandise inventory purchased and sold.