Inland Equipment sells hand-held engine analyzers to automotive service shops. Inland Equipment started April with an inventory of 85 units that cost a total of $12,750. During the month, Inland Equipment purchased and sold merchandise on account as follows:
Apr 6 Purchased 125 units @ $160
13 Sold 110 units @ $310
19 Purchased 130 units @ $168
25 Sold 80 units @ $310
29 Sold 75 units @ $310
Inland Equipment uses the FIFO method. Cash payments on account totaled $21,700. Operating expenses for the month were $12,000, 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 physical flow of Inland Equipment's inventory?
2. Prepare a perpetual inventory record, using FIFO cost, for this merchandise.
3. Journalize all transactions using FIFO. Record the payments on account and the operating expenses on the 30th.