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# Inventories: Measurement

Spencer Company Inventory Transactions For the Month of September 2000

# Periodic Inventory System - LIFO Cost Flow Assumption

9/1/00

Beginning inventory

9/10/00

Purchase of merchandise

9/25/00

Purchase of merchandise

9/30/00

Goods available for sale

Date

Transaction

# Cost of goods sold:

9/25/00

Purchase of merchandise

9/10/00

Purchase of merchandise

9/1/00

Beginning inventory

Cost of goods sold

9/1/00

1,000

\$12.50

\$12,500

500

\$11.00

5,500

1,300

\$10.00

13,000

2,800

\$31,000

700

\$10.00

\$7,000

2,000

\$10.00

\$20,000

500

11.00

5,500

1,000

12.50

12,500

3,500

\$38,000

Price

# Total

• Perpetual inventory system

If the entity is using the perpetual inventory system cost of goods sold is calculated at point of each sale based on the most recently purchased merchandise at that date.

Example: Assuming the same facts as above the cost of goods sold and ending inventory using the Perpetual Inventory and applying the LIFO cost flow assumption is as follows:

## F:\Teaching\3321\web\module4\c8\tnotes\c8a.doc

3/12/2007

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