which inventory method most likely mimics the physical flow of fit world rsquo s inv 559736

Accounting for inventory using the perpetual system—LIFO, and journalizing inventory transactions

Fit World began January with an inventory of 80 crates of vitamins that cost a total of $4,000. During the month, Fit World purchased and sold merchandise on account as follows:

Purchase 1

140 crates

@ $ 55

Sale 1

160 crates

@ $ 100

Purchase 2

160 crates

@ $ 60

Sale 2

170 crates

@ $ 110

Fit World uses the LIFO method. Cash payments on account totaled $5,000. Operating expenses for the month were $3,300, with two thirds paid in cash, and the rest accrued as Accounts payable.

Requirements

1. Which inventory method most likely mimics the physical flow of Fit World’s inventory?

2. Prepare a perpetual inventory record, using LIFO cost, for this merchandise.

3. Journalize all transactions using LIFO.

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