Exercise 5-9B Effect of cost flow on ending inventory: intermittent sales and purchases Nash Auto Parts, Inc. had the following transactions for Year 2: Required Date Transaction Description Jan. 1 Beginning Inventory 40 units $22 Mar. 15 Purchased 150 units $24 May 30 Sold 175 units $48 Aug. 10 Purchased 320 units $26 Nov. 20 Sold 300 units a $50 a. Determine the quantity and dollar amount of inventory at the end of the year, assuming Nash Auto Parts, Inc. uses the FIFO cost flow assumption and keeps perpetual records. b. Write a memo explaining why Nash Auto Parts, Inc. would have difficulty applying the LIFO method on a perpetual basis. Include a discussion of how to overcome these difficulties. EXERCISE 5-9B a. Nash Auto Parts, Inc. Date Purchased Sold Units Cost Total Units Cost Total Inventory Balance Total Units Cost 1/1 Beg. Inv. 40 @ $22= $ 880 40 @ $22 = 3/15 Pur. @ $ @ $ SS $ 880 $ 5/30 Sold 175 units SS ss -0- in 8/10 Pur 11/20 Sold -0- 300 units $ Ending Inventory: units =$ b. A problem arises when LIFO is applied to a perpetual basis inventory system. Explain: This problem is often overcome by: