The Following Transactions Apply to Sam's Skateboards Assume the Use of the Perpetual Inventory Method and That

question 32

Essay

The following transactions apply to Sam's Skateboards.
$\begin{array}{lll}1-\text {-January }& \text { Beginning inventory } & 50 \text { units } @\$ 120 \\12 \text {-January } & \text { Purchase } & 30 \text { units } @\$ 104 \\19 \text {-March } & \text { Sales } & 60 \text { units }@ \$ 190 \\\text { 8-January } & \text { Purchase } & 20 \text { units }@ \$ 116 \\\text { 4-November } & \text { Sales } & 35 \text { units }@ \$ 200\end{array}$ Assume the use of the perpetual inventory method and that all transactions were for cash.
Required:Determine the amount of ending inventory using a FIFO cost flow.

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Definitions:

Direct Method

A cash flow statement reporting approach that lists major operating cash receipts and payments, used to show actual cash flows.

Cash Payments

Cash Payments are transactions where monetary value is transferred from one party to another in the form of cash or its equivalent to settle a debt or purchase a good or service.

Positive Cash Effect

The increase in the cash holdings of a business, typically resulting from operational activities, investments, or financing activities that bring in more cash.

Investing Activities

Transactions involving the acquisition or disposal of long-term assets and investments, recorded in the financial statements.