Question

Neverstop Corporation sells item A as part of its product line. Information about the beginning inventory, purchases, and sales of item A are given in the following table for the first six months of 2017. The company uses a perpetual inventory system: Purchases Sales Number of Units 590 Unit Cost $4.30 Number of Units Sales Price Date January 1 (beginning inventory) January 24 February 8 March 16 June 11 390 690 $4.40 $4.55 $5.80 $6.00 650 390

what are the journal entries?

Answer 1

Credits Journal entries :- Date Accounts Title & Explanation 24-Jan Accounts Receivable To Sales Revenue (390*5.80) (Entry for recording of sales revenue on credit) Debit 2,262 2,262 24-Jan 1,677 Cost of goods sold (390*4.30) To Merchandise Inventory (Entry for recording of cost of goods sold) 1,677 Weighted average cost per unit is = 5 4.30 (since only beginning inventory) 08-Feb 3,036 Merchandise Inventory (690*4.40) To Accounts Payable (Entry for recording of purchase of credit) 3,036 16-Mar 3,900 Accounts Receivable To Sales Revenue (650*6.00) (Entry for recording of sales revenue on credit) 3,900 16-Mar 2,847 Cost of goods sold (650*4.38) To Merchandise Inventory (Entry for recording of cost of goods sold) 2,847 Weighted average cost per unit is = ((200*4.30)+(690*4.40)/(200+690) - $ 4.38/. 11-Jun 1,775 Merchandise Inventory (390*4.55) To Accounts Payable (Entry for recording of purchase of credit) 1,775