10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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E7-12 (Algo) Using FIFO for Multiproduct Inventory Transactions (Chapters 6 and 7) [LO 6-3, LO 6-4, LO 7-3]

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[The following information applies to the questions displayed below.]

FindMe Incorporated, (FI) has developed a coin-sized tracking tag that attaches to key rings, wallets, and other items and can be prompted to emit a signal using a smartphone app. FI sells these tags, as well as water-resistant cases for the tags, with terms FOB shipping point. Assume FI has no inventory at the beginning of the month, and it has outsourced the production of its tags and cases. FI uses FIFO and has entered into the following transactions:

January 2	FI purchased and received 330 tags from Xioasi Manufacturing (XM) at a cost of $11 per tag, n/15.
January 4	FI purchased and received 130 cases from Bachittar Products (BP) at a cost of $2 per case, n/20.
January 6	FI paid cash for the tags purchased from XM on January 2.
January 8	FI mailed 230 tags via the U.S. Postal Service (USPS) to customers at a price of $34 per tag, on account.
January 11	FI purchased and received 430 tags from XM at a cost of $14 per tag, n/15.
January 14	FI purchased and received 230 cases from BP at a cost of $3 per case, n/20.
January 16	FI paid cash for the cases purchased from BP on January 4.
January 19	FI mailed 190 cases via the USPS to customers at a price of $11 per case, on account.
January 21	FI mailed 330 tags to customers at a price of $34 per tag, on account.

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E7-12 (Algo) Using FIFO for Multiproduct Inventory Transactions (Chapters 6 and 7) [LO 6-3, LO 6-4, LO 7-3]

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January 2	FI purchased and received 330 tags from Xioasi Manufacturing (XM) at a cost of $11 per tag, n/15.
January 4	FI purchased and received 130 cases from Bachittar Products (BP) at a cost of $2 per case, n/20.
January 6	FI paid cash for the tags purchased from XM on January 2.
January 8	FI mailed 230 tags via the U.S. Postal Service (USPS) to customers at a price of $34 per tag, on account.
January 11	FI purchased and received 430 tags from XM at a cost of $14 per tag, n/15.
January 14	FI purchased and received 230 cases from BP at a cost of $3 per case, n/20.
January 16	FI paid cash for the cases purchased from BP on January 4.
January 19	FI mailed 190 cases via the USPS to customers at a price of $11 per case, on account.
January 21	FI mailed 330 tags to customers at a price of $34 per tag, on account.

rev: 10_06_2021_QC_CS-281075

E7-12 (Algo) Part 1

Required:

Prepare journal entries for each of the above dates, assuming FI uses a perpetual inventory system. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

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