Concept explainers
(a) (1)
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.
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.
Moving -average cost method: Under moving average cost method company calculate a new average after every purchases made. It is determined by dividing the cost of goods available for sale by the units on hand.
To Determine: The ending inventory under FIFO.
(2)
The ending inventory under Moving-average.
(3)
The ending inventory under LIFO method.
(b)
The highest ending inventory costing method.
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Chapter 6 Solutions
Financial Accounting: Tools for Business Decision Making, 8th Edition
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