Question

Strods Company reported the following purchases and sales of its only product. Strods uses a periodic inventory system. Determine the cost assigned to ending inventory using LIFO.

Date	Activities	Units Acquired at Cost	Units Sold at Retail
May 1	Beginning Inventory	170 units @ $12
5	Purchase	230 units @ $14
10	Sales		150 units @ $22
15	Purchase	110 units @ $15
24	Sales		100 units @ $23

Juniper Company uses a perpetual inventory system and the gross method of accounting for purchases. The company purchased $9,750 of merchandise on August 7 with terms 1/10, n/30. On August 11, it returned $1,500 worth of merchandise. On August 16, it paid the full amount due. The correct journal entry to record the purchase on August 7 is:

Answer 1

SOLUTION: 1
	LIFO METHDO - PERIODICAL
			COST OF GOODS AVAILABLE FOR SALE	COST OF GOODS SOLD	CLOSING STOCK
	Date	Particulars	Units	Cost Per unit	Total	Units	Cost Per unit	Cost of Goods Sold	Units	Cost Per unit	Ending inventory
	May, 01	Beginning Balance	170	$                            12	$                      2,040				170	$               12	$             2,040
	May, 05	Purchases	230	$                            14	$                      3,220	140	$               14	$             1,960	90	$               14	$             1,260
	May, 15	Purchases	110	$                            15	$                      1,650	110	$               15	$             1,650
		Total Goods Available For sale	510		$                      6,910	250		$             3,610	260		$             3,300
	Answer = Ending inentory using LIFO = 260 Units and total cost is $ 3,300
SOLUTION: 2
	Journal entry as on August 7 is as below,
	Date	Account Title and explanation	Debit	Credit
	August, 07	Merchandise Inventory	$9,750
		Account Payble		$9,750
		(To record the purchase of inventory )
	Note: In gross method of accounting at the time of purchase full value of purchase is taken and at
	the time of payment discount factor is taken if payment is made within credit time