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A company that uses a perpetual merchandise inventory system made the following cash purchases and sales: Jan. 1-Purchased 100 units at $10 per unit. Feb. 5-Purchased 60 units at $12 per unit. Mar. 16-Sold for cash 40 units for $16 per unit. Prepare journal entries to record the sale assuming a FIFO system is used. Cash Sales (40x $16) 640 Cost of goods sold Merchandise Inventory (40x $10 ) 640 400 400 02

A company that uses a perpetual merchandise inventory system made the following cash purchases and sales: Jan. 1-Purchased 100 units at $10 per unit. Feb. 5-Purchased 60 units at $12 per unit. Mar. 16-Sold for cash 40 units for $16 per unit. Prepare journal entries to record the sale assuming a FIFO system is used. Cash Sales (40x $16) 640 Cost of goods sold Merchandise Inventory (40x $10 ) 640 400 400 02

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A company that uses a perpetual merchandise inventory system made the following cash purchases and sales: Jan. 1-Purchased 100 units at $10 per unit. Feb. 5-Purchased 60 units at $12 per unit. Mar. 16-Sold for cash 40 units for $16 per unit. Prepare journal entries to record the sale assuming a FIFO system is used. Cash Sales (40x $16) 640 Cost of goods sold Merchandise Inventory (40x $10 ) 640 400 400 02
Transcribed Image Text:A company that uses a perpetual merchandise inventory system made the following cash purchases and sales: Jan. 1-Purchased 100 units at $10 per unit. Feb. 5-Purchased 60 units at $12 per unit. Mar. 16-Sold for cash 40 units for $16 per unit. Prepare journal entries to record the sale assuming a FIFO system is used. Cash Sales (40x $16) 640 Cost of goods sold Merchandise Inventory (40x $10 ) 640 400 400 02
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