Summers Company Began Business on August 1, 2017, and Uses

question 50

Essay

Summers Company began business on August 1, 2017, and uses the periodic inventory method. During August, Summers made the following purchases:
$\begin{array}{lll}\text { August } 3 & 100 \text { units @ } \$ 10 & \$ 1,000 \\\text { August } 21 & 300 \text { units } @ \$ 20 & \$ 6,000\end{array}$
Other information provided:
$$\begin{array} { l r } \text { August sales } & 350 \text { units at } \$ 50 \text { each } \\\text { August expenses excluding cast of goods sold } & \$ 7,200 \\\text { August } 31 \text { current assets excluding irventory } & \$ 34,000 \\\text { August } 31 \text { current liabilities } & \$ 25,000\end{array}$$
Calculate Summers' August 31 ending inventory under the FIFO and LIFO cost flow assumptions.

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Definitions:

Perfectly Inelastic

Describes a situation in economics where the quantity demanded or supplied does not change in response to a price change.

Perfectly Inelastic

A market condition where the quantity demanded or supplied is unresponsive to price changes, depicted graphically as a vertical line.

Supply

The total amount of a product or service available for purchase at any given price level.

Inflation Rate

The percentage rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.