Question

I thought for this type of question I am supposed to make a chart with the inventory, purchases, sales, etc., but instead, these questions are throwing me off for the little understanding I have on this new topic...

Kayla Company uses the perpetual inventory system and the LIFO method. The following information is available for the month of June:

June 1 Beginning inventory 200 units @ $5

12 Purchase on account 400 units @ $6

15 Sales on account 440 units

23 Purchase on account 300 units @ $7

27 Sales on account 360 units

The selling price (price the company charged the customers) was $10 per unit.

a) Show the calculation of cost of goods sold and ending inventory under LIFO.

b) What is the amount of Sales Revenue?

c) Prepare a journal entry for the sale of inventory on June 15.

d) In which financial statement does the amount of ending inventory appear?

e) In which financial statement do the amount of sales and amount of cost of goods sold appear?

f) What is the amount of gross margin for month June?

g) What is the gross margin percentage?

Answer 1