Question

Presented below is information related to Bridgeport Enterprises. Jan. 31 Feb. 28 Mar. 31 Apr. 30 Inventory at cost $17,550 $17,667 $19,890 $16,380 Inventory at LCNRV 16,965 14,742 18,252 15,561 Purchases for the month 19,890 28,080 31,005 Sales for the month 33,930 40,950 46,800 Partially correct answer. Your answer is partially correct. Try again. From the information, prepare (as far as the data permit) monthly income statements in columnar form for February, March, and April. The inventory is to be shown in the statement at cost; the gain or loss due to market fluctuations is to be shown separately (using a valuation account).

Answer 1

		February	March	April
(a)	Sales revenue	33,930	40,950	46,800
	Cost of goods sold
	Beginning Inventory	17,550	17,667	19,890
Add:	Purchases	19,890	28,080	31,005
	Goods available for sale	37,440	45,747	50,895
Less:	Ending Inventory	17,667	19,890	16,380
(b)	Cost of goods sold	19,773	25,857	34,515
(a) - (b)	Gross Profit	14,157	15,093	12,285
	Gain (loss) due to fluctuation	-2,340	1,287	819
	Notes:
1	Ending Inventory of the month is the Beginning Inventory of next month and vice versa.
2		Jan-31	Feb-28	Mar-31	Apr-30
	Inventory at cost	17,550	17,667	19,890	16,380
Less:	Inventory at LCNRV	16,965	14,742	18,252	15,561
	Allowance required for reducing inventory at NRV	585	2,925	1,638	819
	Gain (loss) due to fluctuation		-2,340	1,287	819
			(585 - 2,925)	(2,925 - 1,638)	(1,638 - 819)