Question

following transactions QUESTION 2 Northhills Super Save uses a perpetual inventory system and reports the following for the month of December for one of its products: Date Explanation Units Cost/Price December 1 Beginning inventory $40.00 December 6 Purchase 42.00 December 11 Sale 7 88.99 December 24 Purchase 12 43.40 December 26 Purchase 44.00 December 31 Sale 10 88.99 Required: a.) Prepare inventory records using: I. The FIFO method ii. The LIFO method iii. The weighted average method b.) Under each of the methods you prepared in part a.) above, compute Sales, Cost of Goods Sold and Gross Profit. c.) Prepare journal entries for December 26 and December 31 under all methods.

Answer 1

Ques 1

FIFO	Purchases			Sales			Balance
	unit	cost	amount	unit	cost	amount	unit	cost	amount
Dec-01							6	$ 40.00	$ 240.00
Dec-06	4	$ 42.00	$ 168.00				6	$ 40.00	$ 240.00
							4	$ 42.00	$ 168.00
Dec-11				6	$ 40.00	$ 240.00
				1	$ 42.00	$    42.00	3	$ 42.00	$ 126.00
Dec-24	12	$ 43.40	$ 520.80				3	$ 42.00	$ 126.00
							12	$ 43.40	$ 520.80
Dec-26	5	$ 44.00	$ 220.00				3	$ 42.00	$ 126.00
							12	$ 43.40	$ 520.80
							5	$ 44.00	$ 220.00
Dec-31				3	$ 42.00	$ 126.00	5	$ 43.40	$ 217.00
				7	$ 43.40	$ 303.80	5	$ 44.00	$ 220.00
total				17		$ 711.80	10		$ 437.00
LIFO	Purchases			Sales			Balance
	unit	cost	amount	unit	cost	amount	unit	cost	amount
Dec-01							6	$ 40.00	$ 240.00
Dec-06	4	$ 42.00	$ 168.00				6	$ 40.00	$ 240.00
							4	$ 42.00	$ 168.00
Dec-11				4	$ 42.00	$ 168.00
				3	$ 40.00	$ 120.00	3	$ 40.00	$ 120.00
Dec-24	12	$ 43.40	$ 520.80				3	$ 40.00	$ 120.00
							12	$ 43.40	$ 520.80
Dec-26	5	$ 44.00	$ 220.00				3	$ 40.00	$ 120.00
							12	$ 43.40	$ 520.80
							5	$ 44.00	$ 220.00
Dec-31				5	$ 44.00	$ 220.00	3	$ 40.00	$ 120.00
				5	$ 43.40	$ 217.00	7	$ 43.40	$ 303.80
total				17		$ 725.00	10		$ 423.80
W.avg	Purchases			Sales			Balance
	unit	cost	amount	unit	cost	amount	unit	cost	amount
Dec-01							6	$ 40.00	$ 240.00
Dec-06	4	$ 42.00	$ 168.00				6	$ 40.00	$ 240.00
							4	$ 42.00	$ 168.00
							10	$ 40.80	$ 408.00
Dec-11				7	$ 40.80	$ 285.60
							3	$ 40.80	$ 122.40
Dec-24	12	$ 43.40	$ 520.80				3	$ 40.80	$ 122.40
							12	$ 43.40	$ 520.80
							15	$ 42.88	$ 643.20
Dec-26	5	$ 44.00	$ 220.00				15	$ 42.88	$ 643.20
							5	$ 44.00	$ 220.00
							20	43.16	$ 863.20
Dec-31				10	$ 43.16	$ 431.60	10	$ 43.16	$ 431.60
total				17		$ 717.20	10		$ 431.60

NU DU Ques 2 FIFOLIFOW.avg $1,512.83 $1,512.83 $1,512.83 Sales (7+10)*88.99 COGS Gross Profit $ 711.80 $ 725.00 $ 717.20 $ 801.03 $ 787.83 $ 795.63 Ques 3 Accounts Dec-26 Merchandise Inventory cash (5*44) FIFO FIFO debit credit $220.00 $220.00 LIFO debit credit $ 220.00 $ 220.00 W.ave debit credit $ 220.00 $220.00 $889.90 $ 889.90 $ 889.90 Dec-31 Accounts Receivable or cash sales $889.90 $889.90 $889.90 $429.80 $437.00 $431.60 Cost of goods sold Merchandise inventory 429.8 $437.00 $431.60