The Furn Store sells home furnishings, including bean bag chairs. Furn currently uses the periodic...
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The Furn Store sells home furnishings, including bean bag chairs. Furn currently uses the periodic FIFO method of inventory costing, but is considering implementing a perpetual system. It will cost a good deal of money to start and maintain, so Furn would like to see the difference, if any, between the two and is using its bean bag chair inventory to do so. Here is the first quarter information for bean bag chairs:
Date Number of Items Cost per item
January 1 16 19.00
January 17 Purchased 5 20.00
January 24 Sold 7
February 10 Purchased 8 21.00
February 19 Sold 15
March 1 Purchased 11 22.00
March 20 Sold 16
Each bean bag chair sells for $40.
a. Determine Furns cost of goods sold and ending inventory under periodic FIFO.
b. Determine Furns cost of goods sold and ending inventory under perpetual FIFO.
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