Builder Bee Equipment sells hand held engine analyzers to automotive service shops. Builder Bee Equipment started April
Question:
Builder Bee Equipment sells hand held engine analyzers to automotive service shops. Builder Bee Equipment started April with an inventory of 45 units that cost a total of \($5,760.\) During the month, Builder Bee Equipment purchased and sold merchandise on account as follows:
Builder Bee Equipment uses the LIFO method. Cash payments on account totaled \($20,000.\) Operating expenses for the month were \($15,000,\) with two-thirds paid in cash and the rest accrued as Accounts Payable.
Requirements 1. Which inventory method (excluding specific-unit) most likely mimics the physi¬ cal flow of Builder Bee Equipment’s inventory?
2. Prepare a perpetual inventory record, using LIFO cost, for this merchandise.
3. Journalize all transactions using LIFO. Record the payments on account and the operating expenses on the 30th.
Step by Step Answer: