Maria B, Inc. uses a perpetual inventory system. This system includes a perpetual inventory record card for each of the 50 types of the products the company keep in stock. The following transactions show the purchase and sale of particular round table (product code AB-RB7) during November. Nov.1 Balance on hand, 50 units, cost $60 each…………………………………….$3,000 Nov.4Purchase, 20 Units, cost $65 each……………………………………………..$1300 Nov.8Sale, 35 units, Sale price $100 each…………………………………………...$3500 Nov.9 Purchase, 40 units, cost $65 each……………………………………………..$2600 Nov.20Sale, 60 units, sale price $100 each…………………………………………..$6000 Nov.25Purchase 40 units, cost $70 each…………………………………….……….$2800 Nov.30Sale 5 units sale price $110 each………………………………………...…….$550 Required: Record the beginning inventory, the purchases, the cost of goods sold, and the running balance on an inventory record card by Using Average Cost Method & LIFO method. Prepare journal entries to record these purchases and sales in November. Assume that all of the transactions were on account.

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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Maria B, Inc. uses a perpetual inventory system. This system includes a perpetual inventory record card for each of the 50 types of the products the company keep in stock. The following transactions show the purchase and sale of particular round table (product code AB-RB7) during November.

Nov.1 Balance on hand, 50 units, cost $60 each…………………………………….$3,000

Nov.4Purchase, 20 Units, cost $65 each……………………………………………..$1300

Nov.8Sale, 35 units, Sale price $100 each…………………………………………...$3500

Nov.9 Purchase, 40 units, cost $65 each……………………………………………..$2600

Nov.20Sale, 60 units, sale price $100 each…………………………………………..$6000

Nov.25Purchase 40 units, cost $70 each…………………………………….……….$2800

Nov.30Sale 5 units sale price $110 each………………………………………...…….$550

Required:

Record the beginning inventory, the purchases, the cost of goods sold, and the running balance on an inventory record card by Using Average Cost Method & LIFO method.
Prepare journal entries to record these purchases and sales in November. Assume that all of the transactions were on account.

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