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Recording in the Accounting System

The cost of merchandise sold and merchandise inventory is determined from the inventory cost flow assumption. To illustrate, beginning inventory, purchases and sales of shoes are shown below for Grant Co., using a perpetual inventory system.

In the table below, fill in the March 24 quantity, unit cost, and total cost in the spaces provided for determining Cost of Merchandise Sold (COMS) and Merchandise Inventory under the FIFO cost flow assumption, assuming 32 shoes are sold on March 24. Determine the COMS and Merchandise inventory final balances. If units are in inventory or are listed under cost of merchandise sold at two different costs, enter the units that were purchased earliest first.

					FIFO Cost Flow Assumption
		Purchases				Cost of Merchandise Sold				Merchandise Inventory
Date		Quantity	Unit Cost	Total Cost		Quantity	Unit Cost	Total Cost		Quantity	Unit Cost	Total Cost
Mar.	1	22	35	770						22	35	770
	7					15	35	525		7	35	245
	11	35	49	1,715						7	35	245
										35	49	1,715
	24
	31	Balances

In the table below, fill in the March 24 quantity, unit cost, and total cost in the spaces provided for determining Cost of Merchandise Sold (COMS) and Merchandise Inventory under the LIFO cost flow assumption, assuming 32 shoes are sold on March 24. Determine the COMS and Merchandise inventory final balances. If units are in inventory or are listed under cost of merchandise sold at two different costs, enter the units that were purchased earliest first.

					LIFO Cost Flow Assumption
		Purchases				Cost of Merchandise Sold				Merchandise Inventory
Date		Quantity	Unit Cost	Total Cost		Quantity	Unit Cost	Total Cost		Quantity	Unit Cost	Total Cost
Mar.	1	22	35	770						22	35	770
	7					15	35	$525		7	35	245
	11	35	49	1,715						7	35	245
										35	49	1,715
	24
	31	Balances

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