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Cushing Inc: Cost-flow assumptions, FIFO and LIFO using periodic and perpetual systems

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Cost-flow assumptions-FIFO and LIFO using periodic and perpetual systems.
The inventory records of Cushing, Inc., reflected the following information for the year ended December 31, 2004:

# of unit Unit Cost Total Cost
Inventory, January 1 . . . . . . . . . . . . . . . . 100 $13 $1,300
Purchases:
May 30 . . . . . . . . . . . . . . . . . . . . . . . . . . 160 15 2,400
September 28 . . . . . . . . . . . . . . . . . . . . 200 16 3,200

Goods available for sale . . . . . . . . . . . . . 460 $6,900

Sales:
February 22 . . . . . . . . . . . . . . . . . . . . . . (70)
June 11 . . . . . . . . . . . . . . . . . . . . . . . . . (150)
November 1 . . . . . . . . . . . . . . . . . . . . . . (190)

Inventory, December 31 . . . . . . . . . . . . . . 50

Required:
a. Assume that Cushing, Inc., uses a periodic inventory system. Calculate cost
of goods sold and ending inventory under FIFO and LIFO.
b. Assume that Cushing, Inc., uses a perpetual inventory system. Calculate cost
of goods sold and ending inventory under FIFO and LIFO.
c. Explain why the FIFO results for cost of goods sold and ending inventory
are the same in your answers to parts a and b, but the LIFO results are
different.
d. Explain why the results from the LIFO periodic calculations in part a cannot
possibly represent the actual physical flow of inventory items.

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