Question

Use the following information to answer Exercises E6-16 through E6-18.

Golf Unlimited carries an inventory of putters and other golf clubs. The sales price of each putter is $119. Company records indicate the following for a particular line of Golf Unlimited’s putters:

Date	Item	Quantity	Unit Cost
Nov. 1	Balance	24	$ 53
6	Sale	20
8	Purchase	30	?70
17	Sale	30
30	Sale	?2

E6-16 Measuring and journalizing merchandise inventory and cost of goods sold—FIFO

Learning Objective 2

1. COGS $3,232

Requirements

Prepare a perpetual inventory record for the putters assuming Golf Unlimited uses the FIFO inventory costing method. Then identify the cost of ending inventory and cost of goods sold for the month.

Journalize Golf Unlimited’s inventory transactions using the FIFO inventory costing method. (Assume purchases and sales are made on account.)

Answer 1

Solution:

Computation of ending inventory COGS under FIFO - Golf Unlimited
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Nov	24	$53.00	$1,272	0	$0.00	$0	0	$0.00	$0	24	$53.00	$1,272.00
6-Nov	24	$53.00	$1,272	0	$0.00	$0	20	$53.00	$1,060	4	$53.00	$212.00
8-Nov	4	$53.00	$212	30	$70.00	$2,100	0	$0.00	$0	4	$53.00	$212.00
										30	$70.00	$2,100.00
17-Nov	4	$53.00	$212.00	0	$0.00	$0.00	4	$53.00	$212.00	4	$70.00	$280.00
	30	$70.00	$2,100.00				26	$70.00	$1,820.00
30-Nov	4	$70.00	$280.00	0	$0.00	$0.00	2	$70.00	$140.00	2	$70.00	$140.00
Total									$3,232.00			$140.00

Journal Entries - Golf Unlimited
Date	Particulars	Debit	Credit
6-Nov	Accounts receivables Dr	$2,380.00
	To Sales Revenue		$2,380.00
	(To Record Sales)
6-Nov	Cost of goods sold Dr	$1,060.00
	To Inventories		$1,060.00
	(To record cost of goods sold)
8-Nov	Inventories Dr	$2,100.00
	To Accounts Payable		$2,100.00
	(To record purchase of inventory)
17-Nov	Accounts receivables Dr	$3,570.00
	To Sales Revenue		$3,570.00
	(To Record Sales)
17-Nov	Cost of goods sold Dr	$2,032.00
	To Inventories		$2,032.00
	(To record cost of goods sold)
30-Nov	Accounts receivables Dr	$238.00
	To Sales Revenue		$238.00
	(To Record Sales)
30-Nov	Cost of goods sold Dr	$140.00
	To Inventories		$140.00
	(To record cost of goods sold)