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Beginning inventory, purchases, and sales data for portable DVD players are as follows:
April 1
Inventory
120 units at $39
6
Sale
90 units
14
Purchase
140 units at $40
19
110 units
25
45 units
30
160 units at $43
The business maintains a perpetual inventory system, costing by the first-in, first-out method.
a. Determine the cost of the merchandise sold for each sale and the inventory balance after each sale.
b. Based upon the preceding data, would you expect the inventory to be higher or lower using the last-in, first-out method?
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A firm has a current ratio of 1.8, a quick ratio of 0.7, and current liabilities of $1,200. What is the value of the inventory account?
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