During July, Laesch Company, which uses a perpetual inventory system, sold 1,380 units from its LIFO-based inventory, which had originally cost $15 per unit. The replacement cost is expected to be $30 per unit. Required: Please respond to the following two independent scenarios as requested.
a. Case 1: In July, the company is planning to reduce its inventory and expects to replace only 940 of these units by December 31, the end of its fiscal year.
1. Prepare the entry in July to record the sale of the 1,380 units.
2. Prepare the entry for the replacement of the 940 units in September at an actual cost of $34 per unit.
3. Case 2: In July, the company is planning to reduce its inventory and expects to replace only 360 of its units by December 31, the end of its fiscal year. Prepare the entry in July to record the sale of the 1,380 units.
4. In December, the company decided not to replace any of the 1,380 units. Prepare the entry required on December 31 to eliminate any valuation accounts related to the inventory that will not be replaced. LIFO valuation account)