Question

California Cycles started October with 25 bicycles that cost $65 each. On October 16, California bought 50 bicycles at 580 each. On October 31, California sold 49 bicycles for $99 each Requirements 1. Prepare California Cycle's perpetual inventory record assuming the company uses the UFO inventory costing method 2. Journalize the October 16 purchase of merchandise inventory on account and the October 31 sale of merchandise inventory on account Requirement 1. Prepare California Cycle's perpetual Inventory record assuming the company uses the LIFO inventory costing method Start by entering the beginning inventory balances. Enter the transactions in chronological order, calculating new Inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of inventory purchased, sold, and on hand at the end of the period. (For cost of goods sold, enter the first layer out under LIFO Couting first. For inventory on hand enter the oldest inventory layer first. Abbreviation used OTY Quantity: Tot. Total) California Cycles Purchases Cost of Goods Sold ventory on Hand Date QTY Unit Cost Tot. Cost QTY Unit Cost Tot. Cost QTY Unit Cost Tot. Cost Oct. 1 Oct. To Oct. 31 Choose from any list or enter any number in the input fields and then continue to the next question.

Answer 1

Solution: 1 California Cycle's perpetual inventory record by LIFO method: California Cycle Cost of Goods Sold QTY Unit Cost Tot. Cost Purchase Unit Cost Tot. Cost QTY Date Oct. 1 Oct. 16 50 $80 4,000 Inventory on Hand QTY Unit Cost Tot. Cost $65 $1,625 $65 $5,625 $80 $65 $1,705 Oct. 31 49 $803,920 $80 Ending Inventory = $1,705 Cost of Goods Sold = $3,920

Date Debit Credit Account Purchase of Merchandise Inventory Oct. 16 $4,000 $4,000 Merchandise Inventory Accounts Payable (To record of purchase of Merchandise Inventory on account.) Sale of Merchandise Inventory Oct. 31 $4,851 $4,851 Accounts Receivable Sales (To record credit sales @ $99 per unit) (49 x $99 = $4,851)