Question
The following information pertains to the inventory of Parvin Company during Year 2: Jan. 1 Beginning Inventory 650 units @ $ 40 Apr. 1 Purchased
The following information pertains to the inventory of Parvin Company during Year 2:
Jan. 1 | Beginning Inventory | 650 | units | @ | $ | 40 | |
Apr. 1 | Purchased | 2,500 | units | @ | $ | 45 | |
Oct. 1 | Purchased | 850 | units | @ | $ | 48 | |
During Year 2, Parvin sold 3,500 units of inventory at $80 per unit and incurred $44,000 of operating expenses. Parvin currently uses the FIFO method but is considering a change to LIFO. All transactions are cash transactions. Assume a 30 percent income tax rate. Parvin started the period with cash of $80,000, inventory of $26,000, common stock of $55,000, and retained earnings of $51,000.
Required a. Record the above transactions in general journal form and post to T-accounts using (1) FIFO and (2) LIFO. Use a separate set of journal entries and T-accounts for each method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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