Exercise 7-9

Prepare journal entries affecting inventory using the LIFO perpetual inventory procedure (L.O. 3, 5)

Wells Company had the following transactions during February:

1. Purchased 135 units at $65 on account.

2. Sold 108 units at $90 on account.

3. Purchased 170 units at $75 on account.

4. Sold 122 units at $95 on account.

5. Sold 67 units at $100 on account.

The beginning inventory consisted of 67 units purchased at a cost of $55.

Prepare the journal entries relating to inventory for these five transactions, assuming Wells accounts for inventory using the perpetual inventory procedure and the LIFO inventory method. Do not record the entries for sales.