Inventory cost flow methods; perpetual system
Marcus Comp uses a perpetual system. The following transactions affected its merchandise inventory during t the month of August 2011:
August 1 Inventory on hand -2,000 units; cost $ 6.10 each
8- Purchased 10,000 units for $5.50
14- Sold 8,000 units for $12.00 each.
18- Purchased 6,000 units for $5.00 each.
25- Sold 7,000 units for $11.00 each.
31- Inventory on hand - 3,000 units.
Required:
Determine the inventory balance Marcus would report in its August 31,2011 balance sheet and the cost of goods sold it would report in its August 2011 income statement using each of the following cost flow methods:
1. First in, First-out (FIFO)
2. Last, in First -out (LIFO)
3. Average Cost.