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CP7-1 Analyzing the Effects of Four Alternative Inventory Costing Methods [LO 7-3 Scrappers Supplies tracks...

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Accounting

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CP7-1 Analyzing the Effects of Four Alternative Inventory Costing Methods [LO 7-3 Scrappers Supplies tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Transactions Units Unit Cost 140 $26 Beginning inventory, January 1 Transactions during the year: a. Purchase on account, March 2 b. Cash sale, April 1 ($42 each) c. Purchase on account, June 30 d. Cash sale, August 1 (S42 each) 270 28 (290) 190 32 (65) TIP: Although the purchases and sales are listed in chronological order, Scrappers determines the cost of goods sold after all of the purchases have occurred

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