(Learning Objectives 1, 2: Show how to account for inventory transactions; applythe FIFO cost method) Spear Corporation’s inventory records for its retail division show thefollowing at May 31:May 1 Beginning inventory ............... 10 units @ $160 = $1,60015 Purchase................................. 5 units @ 161 = 80526 Purchase................................. 14 units @ 170 = 2,380At May 31, 11 of these units are on hand. Journalize the following for Spear Corporation underthe perpetual system:1. Total May purchases in one summary entry. All purchases were on credit.2. Total May sales and cost of goods sold in two summary entries. The selling price was $560per unit, and all sales were on credit. Assume that Spear uses the FIFO inventory method.3. Under FIFO, how much gross profit would Spear earn for the month ending May 31? Whatis the FIFO cost of Spear Corporation’s ending inventory?
(Learning Objectives 1, 2: Show how to account for inventory transactions; apply
the FIFO cost method) Spear Corporation’s inventory records for its retail division show the
following at May 31:
May 1 Beginning inventory ............... 10 units @ $160 = $1,600
15 Purchase................................. 5 units @ 161 = 805
26 Purchase................................. 14 units @ 170 = 2,380
At May 31, 11 of these units are on hand. Journalize the following for Spear Corporation under
the perpetual system:
1. Total May purchases in one summary entry. All purchases were on credit.
2. Total May sales and cost of goods sold in two summary entries. The selling price was $560
per unit, and all sales were on credit. Assume that Spear uses the FIFO inventory method.
3. Under FIFO, how much gross profit would Spear earn for the month ending May 31? What
is the FIFO cost of Spear Corporation’s ending inventory?
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
