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In: Accounting

The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of...

The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations:

Jan. 20 Purchased 490 units @ $ 8 = $ 3,920
Apr. 21 Purchased 290 units @ $ 10 = 2,900
July 25 Purchased 370 units @ $ 13 = 4,810
Sept. 19 Purchased 180 units @ $ 15 = 2,700


During the year, The Shirt Shop sold 1,080 T-shirts for $24 each.

b. Record the above transactions in general journal form and post to T-accounts using (1) FIFO, (2) LIFO, and (3) weighted average. Use a separate set of journal entries and T-accounts for each method. Assume all transactions are cash transactions.

----->>>>>T CHARTS OF GJ FIFO, GJ LIFO, GJ WA, GJ ACC FIFO, GJ ACC LIFO, GJ ACC WA.

Solutions

Expert Solution

FIFO Method

Date Particulars Debit ($) Credit($)
Jan20 Inventory 3920
Cash 3920
purchased T-shirts 490 @$8
April21 Inventory 2900
Cash 2900
purchased T-shirts 290 @ $10
25 Jul Inventory 4810
Cash 4810
purchased T-shirts 370 @ $13
Sep 19 Inventory 2700
Cash 2700
purchased T-shirts 180 @ $15
dec 31 Cash 25920
Sales 25920
Sales T-shirts 1080 @ $24
Dec31 Cast of goods Sold 10720
Inventory 10720

Cost of goods Sold (490 @$8+290 @ $10+300 @ $13)

(3920+2900+3900)=10720

Inventory Ledger

Date
Debit($)
Credit($)
Balance($)
20-Jan
3920
3920
21-Apr
2900
6820
25-Jul
4810
11630
19-Sep
2700
14330
31-Dec
10720
$3610

Cash Ledger

Date
Debit($)
Credit($)
Balance($)
20-Jan
3920
3920
21-Apr
2900
1020
25-Jul
4810
(3790)

19-Sep

31- Dec

25920

2700

(6490)

$19430


Sales Ledger

Date
Debit($)
Credit($)
Balance($)
31-Dec
25920
$25920

Cast of goods Sold Ledger

Date
Debit($)
Credit($)
Balance($)
31-Dec
10720
$10720

LIFO Method

Date Particulars Debit ($) Credit($)
Jan20 Inventory 3920
Cash 3920
purchased T-shirts 490 @$8
April21 Inventory 2900
Cash 2900
purchased T-shirts 290 @ $10
25 Jul Inventory 4810
Cash 4810
purchased T-shirts 370 @ $13
Sep 19 Inventory 2700
Cash 2700
purchased T-shirts 180 @ $15
dec 31 Cash 25920
Sales 25920
Sales T-shirts 1080 @ $24
Dec31 Cast of goods Sold 12330
Inventory 12330

Cost of goods Sold (180 @ $15+370 @ $13+290 @ $10+240 @$8)

(2700+4810+2900+12330)=12330

Inventory Ledger

Date
Debit($)
Credit($)
Balance($)
20-Jan
3920
3920
21-Apr
2900
6820
25-Jul
4810
11630
19-Sep
2700
14330
31-Dec
12330
$2000

Cash Ledger

Date
Debit($)
Credit($)
Balance($)
20-Jan
3920
3920
21-Apr
2900
1020
25-Jul
4810
(3790)

19-Sep

31- Dec

25920

2700
(6490)

$19430


Sales Ledger

Date
Debit($)
Credit($)
Balance($)
31-Dec
25920
$25920

Cast of goods Sold Ledger

Date
Debit($)
Credit($)
Balance($)
31-Dec
12330
$12330

Weighted Average Method

Date Particulars Debit ($) Credit($)
Jan20 Inventory 3920
Cash 3920
purchased T-shirts 490 @$8
April21 Inventory 2900
Cash 2900
purchased T-shirts 290 @ $10
25 Jul Inventory 4810
Cash 4810
purchased T-shirts 370 @ $13
Sep 19 Inventory 2700
Cash 2700
purchased T-shirts 180 @ $15
dec 31 Cash 25920
Sales 25920
Sales T-shirts 1080 @ $24
Dec31 Cast of goods Sold
11636
Inventory
11636
Cost of goods Sold (1080 @ $11) Average=14330/1330=$10

Inventory Ledger

Date
Debit($)
Credit($)
Balance($)
20-Jan
3920
3920
21-Apr
2900
6820
25-Jul
4810
11630
19-Sep
2700
14330
31-Dec
11636
$2694

Cash Ledger

Date
Debit($)
Credit($)
Balance($)
20-Jan
3920
3920
21-Apr
2900
1020
25-Jul
4810
(3790)

19-Sep

31- Dec

25920

2700
(6490)

$19430


Sales Ledger

Date
Debit($)
Credit($)
Balance($)
31-Dec
25920
$25920

Cast of goods Sold Ledger

Date
Debit($)
Credit($)
Balance($)
31-Dec
11636
$11636

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