A.(completed)

Aug. 1	Beginning merchandise inventory, 15 books @ $15 each
Aug. 3	Sold 4 books @ $19 each
Aug. 12	Purchased 11 books @ $21 each
Aug. 15	Sold 12 books @ $19 each
Aug. 20	Purchased 6 books @ $26 each
Aug. 28	Sold 7 books @ $25 each

a. Determine the cost of goods sold and ending merchandise inventory by preparing a perpetual inventory record using the specific identification method. Assume the following costing information for the books sold during the month:

	August 3:	4 books costing $15 each
	August 15:	4 books costing $15 each and 8 books costing $21 each
	August 28:	2 books costing $21 each and 5 books costing $26 each

Start by entering the beginning inventory balances. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.)

	Purchases			Cost of Goods Sold			Inventory on Hand
		Unit	Total		Unit	Total		Unit	Total
Date	Quantity	Cost	Cost	Quantity	Cost	Cost	Quantity	Cost	Cost
Aug. 1							15	$15	$225
3				4	$15	$60	11	$15	$165
12	11	$21	$231				11	$15	$165
							11	$21	$231
15				4	$15	$60	7	$15	$105
				8	$21	$168	3	$21	$63
20	6	$26	$156				7	$15	$105
							3	$21	$63
							6	$26	$156
				2	$21	$42	7	$15	$105
28				5	$26	$130	1	$21	$21
							1	$26	$26
Totals	17		$387	23		$460	9		$152

B. Determine the cost of goods sold and ending merchandise inventory by preparing a perpetual inventory record using the FIFO inventory costing method.

Start by entering the beginning inventory balances. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.)

August 3:	4 books costing $15 each
	August 15:	4 books costing $15 each and 8 books costing $21 each
	August 28:	2 books costing $21 each and 5 books costing $26 each

	Purchases			Cost of Goods Sold			Inventory on Hand
		Unit	Total		Unit	Total		Unit	Total
Date	Quantity	Cost	Cost	Quantity	Cost	Cost	Quantity	Cost	Cost
Aug. 1
3
12
15
20
28
Totals