A Company Uses the Periodic Inventory System and the Following

question 4

Essay

A company uses the periodic inventory system and the following information is available.All purchases and sales are on credit.
$\begin{array}{|r|l|r|r|r|r|}\hline&&&&&\text { Unit } \\& && \text { Unit } & \text { Total } & \text { Sales }\\&&\text { Units } & \text { Cost } & \text { Cost } & \text { Price }\\\hline 10 / 01 & \text { Inventory balance } & 30 & \$ 3 & \$ 90 \\\hline 10 / 06 & \text { Purchase } & 70 & 4 & 280 \\\hline 10 / 11 & \text { Purchase } & 45 & 5 & 225 \\\hline 10 / 16 & \text { Purchase } & 50 & 6 & 300 \\\hline & \text { Goods available } & 195 & & \$ 895 \\\hline\\\hline 10 / 12 & \text { Sale } & 100&&&10 \\\hline 10 / 20 & \text { Sale } & 60&&&11 \\\hline & \text { Goods sold } & 160 \\\hline & & \\\hline 10 / 31 & \text { Inventory balance } & \underline{35} \\\hline\end{array}$


1.Prepare the general journal entries to record:
The October 6 purchase.
The October 12 sale.
2.Assuming the periodic inventory system is used,determine both the cost of the ending inventory and the cost of goods sold using the LIFO method for October.

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Definitions:

Labor Demand

Labor demand represents the quantity of workers that employers are willing and able to hire at a given wage rate in a certain period.

Product Demand

The desire and willingness to purchase a specific good or service by consumers.

Marginal Product

is the increase in output resulting from a one-unit increase in the quantity of a particular input, while holding other inputs constant.

Competitive Market

A market structure characterized by a large number of sellers and buyers where no single entity has the power to influence market prices significantly.