Question

ASC ASSIGNMENT 7 PARTI company sells one product any sells one product. Presented below are the transaction of the mon Dates Mar. 11 Transaction Inventory Sale Purchase Sale Purchase Sale 100 units at $5 each 80 units at $8 each 150 units at S6 cach 120 units at $8.75 cach 160 units at $7 each 100 units at $9 each uses the FIFO cost flow assumption. All purchases and sales are on account (a) Duses a periodic system Prepare all necessary ournal 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. Debit Debit Credit Date Accounts

Answer 1

Ans a Credit $640 Ans b Sales Less: Cost of good sold Gross Profit $2,590 ($1,750) $840 $640 $900 $1,050 Journal Entry Date Account Title Debit Mar 4 Acconts Receivable Sales (To record sales) Mar 11 Merchandise Inventory $900 Accounts Payable (To record purchases) Mar 13 Acconts Receivable $1,050 Sales (To record sales) Mar 20 Merchandise Inventory $1,120 Accounts Payable (To record purchases) Mar 27 Acconts Receivable $900 Sales (To record sales) Mar 31 Cost of good sold $1,750 Merchandise Inventory (To record cost of good sold) $1,120 $900 $1,750 Periodic inventory System: In this system, the cost of sales and inventory are determined as the end of the accounting First in, first out method (FIFO): In this method it is assumed that inventory which is purchased first will be sold first and the inventory will consist of recent purchases. Cost of Goods Sold Ending inventory Date Unit Rate Amount Date Unit Rate / Amount Mar 1 100 $500 Mar 20 110 $7 $770 Mar 11 150 $900 Mar 20 $350 300 $1,750 110 $770

Ansc Debit Credit Ans d Sales Less: Cost of good sold Gross Profit $2,590 ($1,750) $840 $640 $640 $400 $400 $640 $640 $1,050 $1,050 Journal Entry Date Account Title Mar 4 Acconts Receivable Sales (To record sales) Mar 4 Cost of good sold Merchandise Inventory (To record cost of good sold) Mar 11 Merchandise Inventory Accounts Payable (To record purchases) Mar 13 Acconts Receivable Sales (To record sales) Mar 13 Cost of good sold Merchandise Inventory (To record cost of good sold) Mar 20 Merchandise Inventory Accounts Payable (To record purchases) Mar 27 Acconts Receivable Sales (To record sales) Mar 27 Cost of good sold Merchandise Inventory (To record cost of good sold) $700 $700 $1,120 $1,120 $900 $900 $650 $650

150 Perpetual inventory System: In this system, the cost of sales and inventories are updated on every sales and purchase transactions. First in, first out method (FIFO): In this method it is assumed that inventory which is purchased first will be sold first and the inventory will consist of recent purchases. Purchase Cost of Good Sold Perpetual FIFO Perpetual FIFO Ending inventory - Perpetual FIFO No of Unit Cost Per Unit Total No of Unit Cost Per Unit Total No of Unit Cost Per Unit Total Mar 1 100 $5.00 $500.00 Mar'4 $5.00 $400.00 $5.00 $100.00 Mar'11 150 $6.00 $900.00 20 $5.00 $100.00 $6.00 $900.00 $1,000.00 Mar 13 $5.00 $100.00 $6.00 $300.00 100 $600.00 $700.00 50 $300.00 Mar 20 $7.00 $1,120.00 50 $6.00 $300.00 $7.00 $1,120.00 210 $1,420.00 Mar 27 $6.00 $300.00 1101 $7.00 $770.00 50 $7.00 $350.00 100 $650.00 $770.00 Total 310 $2,020.00 300 $1,750.00 Inventory Cost $770.00 201 170 50 $6.00 120 160