LO7-3 AP7-2 11 16 Reporting the Effects of Inventory Costing Methods on Financial Statement Elements and Evaluating Inventory Management (P7-5) The following details were extracted on November 30, 2017, from the records of Seema Company for a specific product: Date Quantity Unit Cost Unit Sale Price Beginning inventory, January 1 300 $ 9 Purchase, February 10 400 10 Sale, April 7 300 $15 Purchase, August 20 300 Sale, November 29 350 On December 21, 2017, Seema sold 200 units to a customer at $18 per unit. Assume that the com uses a perpetual inventory system and that its fiscal year ends on December 31, 2017 Required: 1. Which inventory costing method does Seema use? Explain. 2. Prepare the journal entries to record the purchase transaction on August 20 and the sale transaction on December 21, assuming that both are cash transactions. 3. Compute the inventory turnover ratio during 2017, and briefly explain what the amoun 4. Assume that the demand for this product slowed down during December 2017, and its realizable value dropped to $9.5 per unit at December 31, 2017. Seema reports its ending at the LC&NRV. Prepare the journal entry that should be recorded at December 31, 201 5. Compute the cost of sales for 2017, assuming for this part only that Seema uses the we average cost method. hiding inventory the weighted