Question

Exercise 8-9 Indigo Company sells one product. Presented below is information for January for Indigo Company. Jan. 1 Inventory 101 units at $4 each 4 Sale 80 units at $8 each 11 Purchase 144 units at $6 each 13 Sale 111 units at $9 each 20 Purchase 156 units at $7 each 27 Sale 100 units at $11 each Indigo uses the FIFO cost flow assumption. All purchases and sales are on account. Assume Indigo 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.

Answer 1

Date	Particulars	Debit	Credit
Jan-04	Accounts Receivale A/c                          Dr.	640
	To Sales A/c		640
Jan-11	Purchases A/c                                          Dr.	864
	To Accounts payable A/c		864
Jan-13	Accounts Receivale A/c                          Dr.	999
	To Sales A/c		999
Jan-20	Purchases A/c                                          Dr.	1,092
	To Accounts payable A/c		1,092
Jan-27	Accounts Receivale A/c                          Dr.	1,100
	To Sales A/c		1,100
	Value of Closing Inventory = 110 Units @ 7 = $770.