Centennial Company sold 600 units of inventory at $20 per unit on account. The company uses the perpetual inventory system and the last-in, first-out (LIFO) inventory costing system. The beginning inventory included 200 units at $9 per unit. The most recent purchases include 700 units at $12 per unit. The sale occurred after the last purchase.
a. Prepare the journal entries to record the sale. Omit explanations.
b. Compute the cost of the ending inventory. Label your work.
Cost of goods sold = 600 units × $12 per unit
b. Ending inventory = beginning inventory (200 units × $9 per unit) + most recent purchases (100 units × $12 per unit)
Ending inventory = $1,800 + $1,200
Ending inventory = $3,000
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