Question

Exercise 8-9 Cheyenne Company sells one product. Presented below is information for January for Cheyenne Company. Jan. Inventory 103units $5each 4 Sale 20 Purdhase 27 Sale 167 units at $7 each 108 units at 11 eadh Cheyenne uses the FIFO cost flow assumption. All purchases and sales are on account. Your answer is partially correct. Try again. Assume Cheyenne uses a periodic system. Prepare all necessary journal entries, including the end-of-month closing entry to record cost of goods sold. A physical count indicates that the ending inventory for January is 113 units. (If no entry is required, select "No entry for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent [x]Your answer is incorrect. Try again. Compute gross profit using the periodic system. Gress profe

Answer 1

Journal Enteries - Periodic FIFO Account Titles and Explanation a) Date Debit Credit Jan-04 Accounts Receivable 656 Sales Revenue (Being Sales recorded) 656 Jan-11 Purchases 945 Accounts Payable (Being Purchases Recorded) 945 Jan-13 Accounts Receivable 918 Sales Revenue 918 (Being Sales recorded) Jan-20 Purchases 1169 Accounts Payable (Being Purchases Recorded) 1169 Jan-27 Accounts Receivable1188 Sales Revenue (Being Sales recorded) $ 1188 Jan-31 Inventory 791 $1,838 Cost of Goods Sold Purchases Inventory $2,114 515 Being Ending Inventory and cost of goods recorded) Cost of goods available for sales Date Explanation Units Unit Cost Total Cost ($) Jan-01 Beginning Inventory Jan-11 Purchase Jan-20 Purchase 103 135 167 405 5 515 945 7 1,169 2,629 Total Total Sales Date Explanation Units Unit Cost Total Cost ( $) Jan-04 Sales Jan-13 Sales Jan-27 Sales Total 82 102 108 292 8 656 9 918 11 1,188 2,762

Ending Inventory- 113 units Computation of Cost of Ending Inventory Date Units Unit Cost Total Cost ($) Jan-20 113 7.00791 113 791 Computation of Cost of Goods Sold Cost of Goods available for sales 2,629 791 1,838 Less: Ending Inventory Gross Profit Sales-Cost of Goods Sold -$2,762-$ 1,838 $924 Journal Enteries Periodic FIFO b) Date Account Titles and Expla Debit Credit Jan-04 Accounts Receivable 656 Sales Revenue (Being Sales recorded) Cost of Goods Sold Inventory (cost of goods sold recorded) 656 $410 410 Jan-11 Inventory 945 Accounts Payable 945 Purchases Recorded) Jan-13 Accounts Receivable 918 Sales Revenue (Being Sales recorded) Cost of Goods Sold Inventory (cost of goods sold recorded) $918 672 $ 672 Jan-20 Inventory 1,169 Accounts Payable Purchases Recorded) 1,169 Jan-27 Accounts Receivable 1,188 Sales Revenue 1,188

(Being Sales recorded) Cost of Goods Sold Inventory (cost of goods sold recorded) $756 756 Schedule Perpetual FIFO For the Month Ended April 30 Cost of Goods Sold Ending Inventory Total Unit Total Date Quantity Unit Cost () Jan-01 Jan-04 Jan-11 Jan-13 Cost (s) Quantity Cost (s) Cost (») tity Cost ( 103 5 515 105 945 82 5 10 21 5 135 7 945 135 7 21 5 81 7 105 Jan-20 Jan-27 Total 567 54 7 167 7 756113 7 378 1,169 791 791 167 7 1,169 108 7 302 2,114 292 1,838 113 Total Sales Date Explanation Units Unit Cost Total Cost ($) Jan-04 Sales Jan-13 Sales Jan-27 Sales Total 82 102 108 292 8 656 9 918 11 1,188 2,762 Gross Profit- Sales-Cost of Goods Sold -$2,762-$ 1,838
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