Underwater Way carries a line of waterproof watches. Underwater Way uses the FIFO method and a perpetual inventory system. The sales price of each watch is $188. Company records indicate the following activity for waterproof watches for the month of August:

Requirements
1. Prepare a perpetual inventory record for the waterproof watches to determine the amount Underwater Way should report for ending inventory and cost of goods sold using the FIFO method.
2. Journalize Underwater Way€™s inventory transactions using the FIFO method. Assume that all purchases and sales are on account.

Transcribed Image Text:

Unit Cost Date Aug1 Balance Item Quantity $106 $110 7 Purchase 11 Sale 19 Purchase 28 Sale 13 16 18 $112