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I. The inventory of records of BeBop Distributing reflected the following for October 2012:
Date Transaction Units Unit Cost
10/1 Beginning inventory 600 $3
10/3 Purchase 500 $4
10/9 Sale 700
10/14 Purchase 600 $5
10/20 Sale 700
10/25 Purchase 200 $6
Required:Answer each of the following questions in the space provided on page 8.
a) Assume that BeBop uses the perpetual FIFOinventory method.
i. Prepare the journal entries to record the 10/3 and 10/9 transactions.
ii.Determine ending inventory at 10/31/12 and cost of goods sold for October.
b) Assume that BeBop uses the perpetual LIFO inventory method.
ii. Determine ending inventory at 10/31/12 and cost of goods sold for October.
iii. Determine the LIFO reserve at 10/31/12.
c) A physical count of inventory on 10/31 showed 475 units on hand. Prepare the necessary journal entries to adjust for shrinkage under the weighted average and LIFO methods.
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