Question

The following data regarding purchases and sales of a commodity were taken from the related perpetual inventory account: (30 points) June 1 Balance 25 units at $60 6 Sale 20 units at $70 8 Purchase 20 units at $61 16 Sale 10 units at $70 20 Purchase 20 units at $62 23 Sale 25 units at $70 30 Purchase 15 units at $63 ​ Record the inventory, purchases, cost of goods sold and sales in a perpetual inventory record similar to what we have done in class on homework, using the first-in first-out method. Journalize the entries in the sales and cost of sales accounts. Assume that all sales were on account. Determine the gross profit from sales for the period. Determine the ending inventory.

Answer 1

Solution: 1
FIFO METHOD		PURHASES	COST OF GOODS SOLD	ENDING INVENTORY
Date	Particulars	Units	Rate	Total Cost	Units	Rate	Total Cost	Units	Rate	Total Cost
June .01	Beginning inventory							25	$         60.00	$         1,500
June .06	Sales				20	$             60.00	$           1,200	5	$         60.00	$            300
June .08	Purchases	20	$                     61.00	$                   1,220				5	$         60.00	$            300
								20	$         61.00	$         1,220
June .16	Sales				5	$             60.00	$               300
					5	$             61.00	$               305	15	$         61.00	$            915
June.20	Purchases	20	$                     62.00	$                   1,240				15	$         61.00	$            915
								20	$         62.00	$         1,240
June.23	Sales				15	$             61.00	$               915
					10	$             62.00	$               620	10	$         62.00	$            620
June.30	Purchases	15	$                     63.00	$                       945				10	$         62.00	$            620
								15	$         63.00	$            945
	Total	55		$                   3,405	55		$           3,340	25		$         1,565
Solution: 2						Ending inventory = $ 1,565
Date	Accounts	Debit	Credit
June.06	Account Receivable	$                1,400
	Sales Revenue		$                     1,400
June.06	Cost of Goods Sold	$                1,200
	Merchandise Inventory		$                     1,200
June.16	Account Receivable (10 X 70)	$                    700
	Sales Revenue		$                         700			ekkarill92 Next > < Previous Related Solutions The following data regarding purchases and sales of a commodity were taken from the related perpetual... The following data regarding purchases and sales of a commodity were taken from the related perpetual inventory account: June 1 Balance 25 units at $60 6 Sale 20 units 8 Purchase 20 units at $61 16 Sale 10 units 20 Purchase 20 units at $62 23 Sale 25 units 30 Purchase 15 units at $63 Calculate the cost of the ending inventory at June 30, using (a) the first-in, first-out (FIFO) method and (b) the last-in, first-out (LIFO) method. Identify... The following data regarding purchases and sales of a commodity were taken from the related perpetual... 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