1) Assume Fong Sai-Yuk uses a periodic system. Prepare all necessary journal ent
ID: 2461909 • Letter: 1
Question
1) Assume Fong Sai-Yuk 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 119 units. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 6,578. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
2)Compute gross profit using the periodic system. (Round answer to 0 decimal places, e.g. 6,578.)
3)Assume Fong Sai-Yuk uses a perpetual system. Prepare all necessary journal entries. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 6,578. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
4)Compute gross profit using the perpetual system. (Round answer to 0 decimal places, e.g. 6,578.)
Fong Sai-Yuk Company sells one product. Presented below is information for January for Fong Sai-Yuk Company.Jan. 1 Inventory 119 units at $4 each 4 Sale 94 units at $8 each 11 Purchase 143 units at $7 each 13 Sale 112 units at $9 each 20 Purchase 168 units at $7 each 27 Sale 105 units at $10 each
Fong Sai-Yuk uses the FIFO cost flow assumption. All purchases and sales are on account.
Explanation / Answer
Schedule of transactions in January:
Date
Opening Inventory
Purchases
Sales
Closing Inventory
Qty
Unit Price
Value
Qty
Unit Price
Value
Qty
Unit Price
Value
Qty
Unit Price
Value
Jan 1
119
4
476
119
4
476
Jan 4
94
4
376
25
4
100
Jan 11
25
4
100
143
7
1001
25
143
4
7
100
1001
Jan 13
25
143
4
7
100
1001
25
87
4
7
100
609
56
7
392
Jan 20
56
7
392
168
7
1176
56
168
7
7
392
1176
Jan 27
56
168
7
7
392
1176
56
49
7
7
392
343
119
7
833
119
4
476
311
7
2177
311
1820
119
7
833
Sales:
Date
Quantity
Unit Price
Value
Jan 4
94
8
752
Jan 13
112
9
1008
Jan 27
105
10
1050
2810
Requirement 1:
Journal Entries using periodic inventory system:
Date
Particulars
Debit
Credit
Jan 4
Accounts Receivable a/c Dr
To Sales a/c
[Being Sales made on credit]
$752
$752
Jan 11
Purchases a/c Dr
To Accounts Payable a/c
[Being Purchases made on credit]
$1001
$1001
Jan 13
Accounts Receivable a/c Dr
To Sales a/c
[Being Sales made on credit]
$1008
$1008
Jan 20
Purchases a/c Dr
To Accounts Payable a/c
[Being Purchases made on credit]
$1176
$1176
Jan 27
Accounts Receivable a/c Dr
To Sales a/c
[Being Sales made on credit]
$1050
$1050
Jan 31
Closing Inventory a/c Dr
Cost of Goods Sold a/c Dr
To Purchases a/c
To Opening Inventory
$833
$1820
$2177
$476
Requirement 2:
Gross Profit using the Periodic System
= Sales – Cost of Goods Sold
= $2810 - $1820
= $990
Requirement 3:
Journal Entries using perpetual inventory system:
Date
Particulars
Debit
Credit
Jan 4
Accounts Receivable a/c Dr
To Sales a/c
[Being Sales made on credit]
$752
$752
Cost of goods sold a/c Dr
To Inventory a/c
[Being Inventory reduced due to sale]
$376
$376
Jan 11
Inventory a/c Dr
To Accounts Payable a/c
[Being Purchases made on credit]
$1001
$1001
Jan 13
Accounts Receivable a/c Dr
To Sales a/c
[Being Sales made on credit]
$1008
$1008
Cost of goods sold a/c Dr
To Inventory a/c
[Being Inventory reduced due to sale]
$709
$709
Jan 20
Inventory a/c Dr
To Accounts Payable a/c
[Being Purchases made on credit]
$1176
$1176
Jan 27
Accounts Receivable a/c Dr
To Sales a/c
[Being Sales made on credit]
$1050
$1050
Cost of goods sold a/c Dr
To Inventory a/c
[Being Inventory reduced due to sale]
$735
$735
Jan 31
No Entry is required
Requirement 4:
Gross Profit using the Periodic System
= Sales – Cost of Goods Sold
= $2810 - $1820
= $990
Date
Opening Inventory
Purchases
Sales
Closing Inventory
Qty
Unit Price
Value
Qty
Unit Price
Value
Qty
Unit Price
Value
Qty
Unit Price
Value
Jan 1
119
4
476
119
4
476
Jan 4
94
4
376
25
4
100
Jan 11
25
4
100
143
7
1001
25
143
4
7
100
1001
Jan 13
25
143
4
7
100
1001
25
87
4
7
100
609
56
7
392
Jan 20
56
7
392
168
7
1176
56
168
7
7
392
1176
Jan 27
56
168
7
7
392
1176
56
49
7
7
392
343
119
7
833
119
4
476
311
7
2177
311
1820
119
7
833
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