Inventory Flow Assumptions
Flat TV Uses a Perpetual Inventory System

question 22

Essay

Inventory flow assumptions
Flat TV uses a perpetual inventory system. Shown below are Flat TV's beginning inventory of a particular product and purchases during January:
On January 23 (prior to the purchase on January 25), Flat TV sold 13 units of this product.
Determine the cost of goods sold relating to the sale on January 23 under each of the following flow assumptions. (Show your computations.)
$$\begin{array} { | l | c | c | c | } \hline & \text { Quantity } & \text { Unit Cost } & \text { Total Cost } \\\hline \text { Beginning inventory (Jan. 1) } & 6 & \$ 195 & \$ 1,170 \\\hline \text { Purchase (Jan. 6) } & 12 & \$ 225 & 2,700 \\\hline \text { Purchase (Jan. 25) } & \underline { 12 } & \$ 230 & \underline { 2,760 } \\\hline \text { Total } & \underline { 30 } & & \$ 6,630 \\\hline\end{array}$$ $\begin{array}{|l|l|}\hline \text { (a) LIFO } & \$ \underline{\quad\quad}\\\hline \text { (b) FIFO } & \$ \underline{\quad\quad}\\\hline \text { (c) Average cost (or moving average) } & \$\underline{\quad\quad} \\\hline\end{array}$

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Definitions:

Limited Partnership (LP)

A Limited Partnership (LP) is a form of partnership consisting of at least one general partner, who manages the business and is personally liable, and one or more limited partners, who contribute capital and share in profits but have limited liabilities.

Jointly Liable

A legal term indicating that two or more parties are equally responsible for the fulfillment of a liability or debt.

UPA

stands for Uniform Partnership Act, which is a set of laws adopted by some states in the United States to govern the formation, operation, and dissolution of partnerships.

RUPA

The Revised Uniform Partnership Act, which is a set of laws aiming to govern the operation of partnerships within the United States.