Question

Metlock Company sells one product. Presented below is information for January for Metlock Company.

Jan. 1 Inventory 110 units at $5 each

Jan. 4 Sale 87 units at $8 each

Jan. 11 Purchase 156 units at $6 each

Jan. 13 Sale 126 units at $9 each

Jan. 20 Purchase 155 units at $6 each

Jan.27 Sale 99 units at $10 each

Metlock uses the FIFO cost flow assumption. All purchases and sales are on account.

1. Assume Metlock uses a periodic system. Prepare all necessary journal entries, including the end-of-month closing entry to record cost of goods sold. A physical count indicates that the ending inventory for January is 109 units.

2. Compute gross profit using the periodic system.

3. Assume Metlock uses a perpetual system. Prepare all necessary journal entries.

4. Compute gross profit using the perpetual system.

Answer 1