acc423 the following transactions affected its merchandise inventory during the mont 491605

E8-14 Inventory cost flow methods; perpetual system ?

[This is a variation of Exercise 8-13 modified to focus on the perpetual inventory system and alternative cost flow methods.]

Altira Corporation uses a perpetual inventory system. The following transactions affected its merchandise inventory during the month of August 2011:

Aug.1 Inventory on hand -2,000 units; cost $6.10 each.

8 Purchased 10,000 units for $5.50 each

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 Altira 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