Question

1. An icon reading text, “Excel” (Periodic versus Perpetual Entries) Fong Sai-Yuk Company sells one product. Presented below is information for January for Fong Sai-Yuk Company.

Jan.	1		Inventory		100 units at $5 each
	4		Sale		80 units at $8 each
	11		Purchase		150 units at $6 each

Fong Sai-Yuk uses the FIFO cost flow assumption. All purchases and sales are on account.

Instructions

a. Assume Fong Sai-Yuk 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 170 units.

b.   Compute gross profit using the periodic system.

c.   Assume Fong Sai-Yuk uses a perpetual system. Prepare all necessary journal entries.

Answer 1