Question

Bramble Company sells one product. Presented below is information for January for Bramble Company. Jan. 1 4 11 Inventory Sale Purchase Sale Purchase Sale 114 units at $5 each 89 units at $8 each 156 units at $7 each 126 units at $9 each 158 units at $7 each 103 units at $11 each 13 20 27 Bramble uses the FIFO cost flow assumption. All purchases and sales are on account. (a) Your answer is correct. Assume Bramble 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 110 units. (If no entry is required, select "No entry for the account titles and enter for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually) Account Titles and Explanation Debit Credit Date 712 in4 v Accounts Receivable 712 Sales Revenue 1092 an. 11 Purchases 1092 Accounts Payable Accounts Receivable Sale

Answer 1

d)

	Purchases	Cost of goods sold	Ending inventory
Date	Units	Unit cost	Total cost	Units	Unit cost	Total cost	Units	Unit cost	Total cost
Jan. 1							114	5	570
Jan. 4				89	5	445	25	5	125
Jan. 11	156	7	1,092				25	5	125
							156	7	1,092
Jan. 13				25	5	125
				101	7	707	55	7	385
Jan. 20	158	7	1,106				213	7	1,491
Jan. 27				103	7	721	110	7	770
						1,998

Cost of goods sold = $1,998

Sales revenue on Jan. 4 = Number of units sold x Selling price per unit

= 89 x 8

= $712

Sales revenue on Jan. 13 = Number of units sold x Selling price per unit

= 126 x 9

= $1,134

Sales revenue on Jan. 27 = Number of units sold x Selling price per unit

= 103 x 11

= $1,133

Total Sales revenue = Sales revenue on Jan. 4 + Sales revenue on Jan. 13 + Sales revenue on Jan. 27

= 712 + 1,134 + 1,133

= $2,979

Gross profit = Total Sales revenue - Cost of goods sold

= 2,979 - 1,998

= $981