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    gwood2's Avatar
    gwood2 Posts: 6, Reputation: 1
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    #1

    Oct 24, 2009, 03:49 PM
    Perpetual LIFO, FIFO, and average cost
    Hi I need some help with this question, my book says that companies hardly use perpetual LIFO, FIFO, and average cost to their inventory and it didn't bother explaining it to us. Then at the end it asks a question about how to do. I don't know where to begin on it, any help would be greatly appreciated.

    Quality Center began operations on July 1. It uses a perpetual inventory system. During July the company had the following purchases and sales.


    Purchases
    Date Units Unit Cost Sales Units
    July 1 12 $108
    July 6 5
    July 11 7 $115
    July 14 5
    July 21 5 $124
    July 27 9

    Determine the ending inventory under a perpetual inventory system using (1) FIFO, (2) average cost, and (3) LIFO. (For average cost computations, round the per unit cost to 3 decimal places, e.g. 50.215. Round final answers to 0 decimal places, e.g. 250.)


    I figured out all the problems using a periodic system, but I can't understand perpetual. Thanks!
    gwood2's Avatar
    gwood2 Posts: 6, Reputation: 1
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    #2

    Oct 24, 2009, 03:52 PM

    Sorry the chart didn't turn out well... on July 6 it only gives sales units of 5, on July 14 it only gives sales units of 4, and on July 27 it only gives sales units as 9
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #3

    Oct 24, 2009, 11:42 PM

    Here is an example of perpetual, if you can follow it. It's harder to learn when you see it after the fact -- much easier to watch it "live."

    http://www.principlesofaccounting.com/chapter%208.htm#perpetual%20inventory%20systems

    If you will give it a shot and post your answers, someone can check them for you.

    And no, it doesn't keep those columns you think are there. You can use little dots though to move stuff over.
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