During June, the receipts and issuances of Material No. A2FO are as follows: Rec

Question

During June, the receipts and issuances of Material No. A2FO are as follows:

Received

Balance

1,100 units at $15

1,700 units at $17

900 units at $18

Issued

700 units for Job No. 116

1,900 units for Job No. 117

800 units for Job No. 118

Received

June 3

Balance

1,100 units at $15

       16

1,700 units at $17

       29

900 units at $18

Issued

June 11

700 units for Job No. 116

        18

1,900 units for Job No. 117

        30

800 units for Job No. 118

(a) Determine the cost of each of the three issues under a perpetual system, using the first-in, first-out method. (b) Present the journal entry to record the issuance of the materials for the month, assuming that the cost of issuances is determined by the first-in, first-out method.

Explanation / Answer

Issuance under First in first out will be as under

Under perpetual system cost of goods sold is debited at every issuance.

Journal entries will be

June 11 700 15 10500 Out of June 3 stock June 18 400 15 6000 Out of June 3 stock 1500 17 25500 Out of June 16 stock Total 31500 June 30 200 17 3400 Out of June 16 stock 600 18 10800 Out of June 29 stock Total 14200

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