Question

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.

Answer 1

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