Question

The Stilton Company has the following inventory and credit purchases during the fiscal year ended December 31, 2017. Beginning 514 units @ $87/unit Feb. 10 260 units @ $84/unit Aug. 21 140 units @ $97/unit Stilton Company has two credit sales during the period. The units have a selling price of $147 per unit. Sales Mar. 15 340 units Sept. 10 245 units Stilton Company uses a perpetual inventory system. Required: 1. Calculate the dollar value of cost of goods sold and ending inventory using: (Do not round intermediate calculations. Round "Average cost per unit" to 2 decimal places. Round the final answers to 2 decimal places.) 2. Calculate the dollar value of cost of goods sold and ending inventory using specific identification, assuming the sales were specifically identified as follows: Mar. 15: 176 units from beginning inventory, and 164 units from the February 10 purchase Sept. 10: 171 units from beginning inventory, and 22 units from the February 10 purchase, and 52 units from the August 21 purchase 3. Using information from your answers in Parts 1 and 2, journalize the credit purchase on February 10 and the credit sale on September 10 for each of: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a. FIFO b. Moving weighted average (Round the final answers to nearest whole dollar.) c. Specific identification

Answer 1

STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL WEIGHTED AVERAGE METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan							514	87	44718
10-Feb	260	84	21840				514	87	44718
							260	84	21840
Average							774	86	66558
15-Mar				340	86	29240	434	86	37318
21-Aug	140	97	13580				434	86	37318
							140	97	13580
Average							574	88.67	50898
10-Sep				245	88.67	21724	329		29174
TOTAL	400		35420	585		50964	329	45	29174
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC SPECIFIC IDENTIFICATION METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan	514	87	44718	347	87	30189	167	87	14529
Purchasse
10-Feb	260	84	21840	186	84	15624	74	84	6216
21-Aug	140	97	13580	52	97	5044	88	97	8536
TOTAL	914		80138	585		50857	329		29281
Journal entries:
FIFO
10-Feb	Merchandise inventory Dr.			21840
	Accounts payable				21840
10-Sep	Accounts receivable Dr.			36015
	Sales revevnue (245*147)				36015
	Cost of goods sold Dr.			21102
	Merchandise inventory (				21102
	(174*87+71*84)
Weighted Average
10-Feb	Merchandise inventory Dr.			21840
	Accounts payable				21840
10-Sep	Accounts receivable Dr.			36015
	Sales revevnue (245*147)				36015
	Cost of goods sold Dr.			21724
	Merchandise inventory (				21724
Specific Identification
10-Feb	Merchandise inventory Dr.			21840
	Accounts payable				21840
10-Sep	Accounts receivable Dr.			36015
	Sales revevnue (245*147)				36015
	Cost of goods sold Dr.			21769
	Merchandise inventory (				21769
	(171*87+22*84+52*97)