Given the following information, determine the journal entries: (Note: When comp

Question

Given the following information, determine the journal entries:    

(Note: When computing the cost of goods sold and ending inventory, please see Exhibits 5A.3, 5A.4 and 5A.5 to prepare a schedule to assist you in the computations. It is a good thing to show your computations in a schedule in case you make a mistake. I will give credit for the problem if it is set up properly and there is a math error as long as I can see the setup)

a. using the weighted average perpetual inventory method.

b. using the LIFO perpetual inventory method.

c. using the FIFO perpetual inventory method.

March beginning inventory is 5 units at $6 per unit.             

March 3: 15 units were purchased at $7 per unit.
March 11: 10 units were purchased at $9 per unit.

March 15: 20 units were sold at $15 per unit.

March 18: 35 units were purchased at $10 per unit.
March 31: 30 units were sold at $20 per unit.

Explanation / Answer

Calculation of Ending Inventory: Weighted Average Cost Date Purchases Sales Balance Units PU Total Cost Units PU Total Cost Units PU Total Cost PU Opening Balance 5.00 6.00 30.00 Weighted Average Cost 03-Mar 15 7.00 105 20.00 6.75 135.00 135/20 Opening Stock 30 Add: Purchases 545 11-Mar 10 9.00 90 30 7.50 225 225/30 Less: Closing Inventory 142 Cost of Goods Sold 433 15-Mar 20 7.50 150 10 7.50 75 18-Mar 35 10 350 45 9.44 425 425/45 31-Mar 30 9.44 283.33 15 9.44 142 Total 65 575 50 433 15 142 Calculation of Ending Inventory: LIFO Date Purchases Sales Balance Units PU Total Cost Units PU Total Cost Units PU Total Cost Opening Balance 5.00 6.00 30.00 LIFO 03-Mar 15 7.00 105 5.00 6.00 30.00 Opening Stock 30.00 15 7.00 105 Add: Purchases 545.00 Less: Closing Inventory 115 11-Mar 10 9.00 90 5.00 6.00 30.00 Cost of Goods Sold 460 15.00 7.00 105.00 10 9.00 90.00 15-Mar 10 9.00 90 5.00 6.00 30.00 10 7.00 70 5.00 7.00 35.00 18-Mar 35 10 350 5.00 6.00 30.00 5.00 7.00 35.00 35 10.00 350.00 31-Mar 30 10.00 300.00 5.00 6.00 30.00 5.00 7.00 35.00 5.00 10.00 50.00 Total 65 575 50 460 15 115 Calculation of Ending Inventory: FIFO Date Purchases Sales Balance Units PU Total Cost Units PU Total Cost Units PU Total Cost Opening Balance 5.00 6.00 30.00 FIFO 03-Mar 15 7.00 105 5.00 6.00 30.00 Opening Stock 30.00 15 7.00 105 Add: Purchases 545.00 Less: Closing Inventory 150.00 11-Mar 10 9.00 90 5.00 6.00 30.00 Cost of Goods Sold 425.00 15.00 7.00 105.00 10.00 9.00 90.00 15-Mar 5.00 6.00 30.00 10.00 9.00 90.00 15.00 7.00 105.00 18-Mar 35 10 350 10.00 9.00 90.00 35.00 10.00 350.00 31-Mar 10 9.00 90.00 15.00 10.00 150.00 20 10.00 200.00 Total 65 575 50 425 15 150

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