Question 1: When is cost of goods sold determined in a perpetual inventory system?
Question 2: In the following separate mini cases, using a periodic inventory system, identify the item(s) designated by letter.
(a) Purchases _ X _ Y _ Net purchases.
(b) Cost of goods purchased _ Net purchases _ X.
(c) Beginning inventory _ X _ Cost of goods available for sale.
(d) Cost of goods available for sale _ Cost of goods sold _ X.
Question 3: "The key to successful business operations is effective inventory management." Do you agree? Explain.
Question 4: Brim Hat Shop received a shipment of hats for which it paid the wholesaler $2,940. The price of the hats was $3,000 but Brim was given a $60 cash discount and required to pay freight charges of $80. In addition, Brim paid $130 to cover the travel expenses of an employee who negotiated the purchase of the hats. What amount will Brim record for inventory? Why?