Question

Whispering Winds Corporation sells one product, with information for July as follows:

July	1		Inventory		100 units at $17.00 each
	4		Sale		80 units at $18.00 each
	11		Purchase		150 units at $16.20 each
	13		Sale		120 units at $18.80 each
	20		Purchase		160 units at $17.70 each
	27		Sale		100 units at $20.60 each

Whispering Winds uses the FIFO cost formula. All purchases and sales are on account. Ignore any estimated returns on purchases and sales.

Assume Whispering Winds uses a periodic system. Prepare all journal entries needed, including the end-of-month adjusting entry to record cost of goods sold. A physical count indicates that the ending inventory for July is 110 units. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Date	Account Titles and Explanation	Debit	Credit
choose a transaction date	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
July 31	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

Calculate gross profit using the periodic system.

Gross profit / (loss)

:

Assume Whispering Winds uses a perpetual system. Prepare all July journal entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Date	Account Titles and Explanation	Debit	Credit
choose a transaction date	enter an account title to record sales on account	enter a debit amount	enter a credit amount
	enter an account title to record sales on account	enter a debit amount	enter a credit amount
	(To record sales on account)
choose a transaction date	enter an account title to record cost of goods sold	enter a debit amount	enter a credit amount
	enter an account title to record cost of goods sold	enter a debit amount	enter a credit amount
	(To record cost of goods sold)
choose a transaction date	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date	enter an account title to record sales on account	enter a debit amount	enter a credit amount
	enter an account title to record sales on account	enter a debit amount	enter a credit amount
	(To record sales on account)
choose a transaction date	enter an account title to record cost of goods sold	enter a debit amount	enter a credit amount
	enter an account title to record cost of goods sold	enter a debit amount	enter a credit amount
	(To record cost of goods sold)

Calculate gross profit using the perpetual system.

Gross profit / (loss) :

Answer 1

Periodic system:

Date	Account Titles and Explanation	Debit	Credit
July 4	Accounts receivable	1440
	Sales revenue (80 x $18)		1440
July 11	Purchases (150 x $16.20)	2430
	Accounts payable		2430
July 13	Accounts receivable	2256
	Sales revenue (120 x $18.80)		2256
July 20	Purchases (160 x $17.70)	2832
	Accounts payable		2832
July 27	Accounts receivable	2060
	Sales revenue (100 x $20.60)		2060
July 31	Cost of goods sold (100 x $17)	1700
	Inventory (beginning)		1700
	Inventory (ending)	1947
	Cost of goods sold (110 x $17.70)		1947

Gross profit/(loss): $741

Sales		5756
Cost of goods sold:
Beginning inventory (100 x $17)	1700
Add: Purchases	5262
Cost of goods available	6962
Less: Ending inventory (110 x $17.70)	1947
Cost of goods sold		5015
Gross profit $		741

Perpetual system:

Date	Account Titles and Explanation	Debit	Credit
July 4	Accounts receivable	1440
	Sales revenue (80 x $18)		1440
	(To record sales on account)
July 4	Cost of goods sold	1360
	Inventory (80 x $17)		1360
	(To record cost of goods sold)
July 11	Inventory (150 x $16.20)	2430
	Accounts payable		2430
July 13	Accounts receivable	2256
	Sales revenue (120 x $18.80)		2256
	(To record sales on account)
July 13	Cost of goods sold	1960
	Inventory [(20 x $17) + (100 x $16.20)]		1960
	(To record cost of goods sold)
July 20	Inventory (160 x $17.70)	2832
	Accounts payable		2832
July 27	Accounts receivable	2060
	Sales revenue (100 x $20.60)		2060
July 27	Cost of goods sold	1695
	Inventory [(50 x $16.20) + (50 x $17.70)]		1695

Gross profit/(loss): $741

Sales	5756
Cost of goods sold	5015
Gross profit $	741