Question

Hercula Cycles started March with 12 bicycles that cost $42 each. On March 16, Hercula bought 40 bicycles at $68 each. On March 31, Hercula sold 25 bicycles for $95 each. Requirements 1. Prepare Hercula Cycle's perpetual inventory record assuming the company uses the specific identification inventory costing method. Assume that Hercula sold 10 bicycles that cost $42 each and 15 bicycles that cost $68 each. 2. Journalize the March 16 purchase of merchandise inventory on account and the March 31 sale of merchandise inventory on account. Requirement 1. Prepare Hercula Cycle's perpetual inventory record assuming the company uses the specific identification inventory costing method. Assume that Hercula sold 10 bicycles that cost $42 each and 15 bicycles that cost $68 each. Start by entering the beginning inventory balances. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first. Abbreviation used: QTY = Quantity; Tot. = Total) Hercula Cycles Purchases Cost of Goods Sold Inventory on Hand QTY Unit Cost Tot. Cost Date QTY Unit Cost Tot. Cost QTY Unit Cost Tot. Cost Mar. 1 Mar. 16 Mar. 31 Totals

Answer 1

Answer is given below

Requirement 1 Cost of Goods Sold Inventory on Hand Purchases Unit Total QTY Date Unit QTY Cost Unit Cost QTY Cost Total Cost Total Cost 01-Mar Opening balance 16-Mar Purchase Cost $42.00 $42.00 $68.00 40 $68.00 $2,720 $504 $504 $2,720 31-Mar Sale 10 $42.00 $68.00 $420 $1,020 $1,440 $42.00 $68.00 15 25_ $84 $1,700 $1,784 2 5 27 $2,720_ Balance Credit Requirement 2 Purchase merchandise inventory on account Date | Accounts and Explanation 16-Mar Merchandise Inventory To Accounts Payable (Being Purchase on Inventory) Debit $2,720 $2,720 Sales of Merchandise inventory on Account Credit Debit $2,375 Date Accounts and Explanation 31-Mar Accounts Receivable To Sales (Being sale of merchandise Inventory on Account) $2,375 / Credit Debit $1,440 Date Accounts and Explanation 31-Mar Cost of Goods Sold To Merchandise Inventory (Being Cost of Goods sold for Merchandise Inventory) $1,440