Purchase Solution

LIFO inventory during June

Not what you're looking for?

Ask Custom Question

During June, Prefer Hardware, which uses a perpetual inventory system, sold 920 units from its LIFO- base inventory, which originally cost $ 12 per unit. The replacement cost is expected to be $ 21 per unit. Prefer is reducing inventory levels and expected to replace only 640 of these units by December 31, the end of the fiscal year.

Required:

a. Prepare the entry in June to record the sale of the 920 units.

b. Prepare the entry for the replacement of the 640 units in August at an actual cost of $19.80 per unit.

Purchase this Solution
Solution Summary

Your response gives you the required journal entries and discusses briefly the reason you must liquidate the LIFO layer.

Solution Preview

June
DEBIT: Cash (or Accounts Receivable)............$ (sales price not given x 920)
CREDIT: Sales ................................................$ (sales price not given x 920)
DEBIT: COGS.........920 x $12 ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution
Free BrainMass Quizzes
Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

View More Free Quizzes
Related BrainMass Solutions

  • FIFO and LIFO inventory systems

    208451 FIFO and LIFO inventory systems During June, the following changes in inventory item 27 took place: June 1 Balance 1,400 units @ $24 14 Purchase 800 units @ $35 24 Purchase 700 units @ $30 8 Sold 400 units @ $50

  • Inventory Costing for Trina's Treasure Retailer

    During June, the store made the following purchases: See attachment What is Scuba Scouts cost of goods sold under FIFO, assuming the company sold 150 wetsuits during June? 3.

  • FIFO and LIFO Inventory Methods: changes to item 27

    208556 FIFO and LIFO Inventory Methods: changes to item 27 During June, the following changes in inventory item 27 took place: 01-Jun Balance 1,400 units @ $24 14 Purchased 800 units @ $36 24 Purchased 700 units

  • Perpetual & Periodic Inventory System

    30 and the cost of goods sold for June under a. first-in, first-out (FIFO) method b. last-in, first-out (LIFO) method c. average cost method 3.Under the perpetual inventory system, determine the cost of inventory on hand at June 30 and the cost of

  • Inventory Valuation- LIFO, FIFO, average cost

    With the LIFO inventory method the ending inventory are 150 units purchased on June 1 and 100 units purchased on June 10 Value= $750 + (100/200) x $ 1200 = $ 750 + $ 600 = $1,350. 13.

  • LIFO/FIFO for starting a business

    164745 LIFO/FIFO for Starting a Business See the attached file. Using the LIFO inventory method, the value of the ending inventory on June 30 (rounded to the nearest dollar) is A) $1,073. B) $1,305. C) $2,895. D) $3,128.

  • FIFO and LIFO Periodic and Perpetual

    358349 FIFO and LIFO Periodic and Perpetual Inventory information for Part 311 of Seminole Corp. discloses the following information for the month of June.

  • Examples of Inventory Control Methods

    391495 Examples of Inventory Control Methods Calculate ending inventory, cost of goods, gross profit, and gross profit rate under each of the following methods LIFO, FIFO, and Average cost.

  • Managerial Accounting Problems

    Paul's Farm Store recorded the following purchases and sales of fertilizer during the past year: Jan. 1 beginning inventory 250 cases @ $23 $ 5,750 Feb. 25 purchased 100 cases @ $26 2,600 June 15 purchased 400 cases @ $28 11,200 Aug

View More Related Solutions