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A company reported the current month purchase and sales data for its only product and uses the perpetual inventory system and allocates costs using the

  1. A company reported the current month purchase and sales data for its only product and uses the perpetual inventory system and allocates costs using the FIFO method. All purchases and sales are made on credit with the companys vendors and customers.

Date

Activities

Units Acquired at Cost

Units Sold at Sales Price

April 1

Beginning Inventory

175 units @ $ 15.00

April 4

Purchase

150 units @ $ 16.00

April 7

Sale

160 units @ $ 30.00

April 10

Purchase

200 units @ $ 17.00

April 16

Sale

250 units @ $ 30.00

April 25

Purchase

160 units @ $ 18.00

April 28

Sale

150 units @ $ 32.00

Using the attached T-account template (or prepare an equation presentation):

  1. document the beginning inventory balance, labeling it BAL and
  2. prepare the entries to recognize the purchases and sales of inventory
  3. document the ending balance in the T-accounts (or in the proper column, if using the equation presentation) in the following accounts:
  • Accounts Receivable
  • Inventory
  • Accounts Payable
  • Sales
  • Cost of Goods Sold (COGS)

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