Question

L. (20) JR Ifre Store reported the following October purchases and sales data for a line of tires it deals. he company uses a perpetual inventory system. 1) Prepare the company's inventory record using LIFO. 2) Identify cost of goods.sold for the month and the profit of the month. 3) Journalize the transactions on October 18 and 26. Date Item Oct. 1 Beginning Inventory Quantity (Unit 10 Unit Price $68 65 90 67 91 2 7 Sales 18 Purchase 26 Sales

Answer 1

	Inventory record Using LIFO
date	description	Units purchased	Price	purchase value	Units sold	Price	cost of sales value	balance units after transaction	Unit price	transaction end inventory
1-Oct	beginning inventory							10	68	680
								2	65	130
	total							12		810
7-Oct	sales				2	65	130
					6	68	408
	total						538
	balance							4	68	272
18-Oct	purchase	4	67	268
	balance							4	67	268
								4	68	272
	total							8		540
26-Oct	sales				4	68	272
					1	67	67
	total						339
	balance							3	67	201
	Profit of the month
	Sales of monthe	(8*90)+(5*91)	1175
	less cost of goods sold	(538+339)	877
	gross profit		298
	Journal entry
	date	explanantion	debit	credit
	7-Oct	cash	720
		sales		720
	7-Oct	cost of goods sold	538
		inventory		538
	26-Oct	cash	455
		sales		455
		cost of goods sold	339
		inventory		339