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*P6-12A You are given the following information about Meesha Novelty's inventory for the month of July. Purchases Sales Date Units Cost per unit Date Units Price per unit July 1 400 $3.00 July 2 300 $6.00 10 1,300 3.10 11 1,000 6.00 13 700 3.40 28 400 6.50 27 600 3.75 Instructions (a) Calculate the cost of goods available for sale and the number of units of ending inventory. (b) Assume Meesha uses FIFO periodic. Calculate the cost of ending inventory, cost of the goods sold, and gross profit

*P6-12A You are given the following information about Meesha Novelty's inventory for the month of July. Purchases Sales Date Units Cost per unit Date Units Price per unit July 1 400 $3.00 July 2 300 $6.00 10 1,300 3.10 11 1,000 6.00 13 700 3.40 28 400 6.50 27 600 3.75 Instructions (a) Calculate the cost of goods available for sale and the number of units of ending inventory. (b) Assume Meesha uses FIFO periodic. Calculate the cost of ending inventory, cost of the goods sold, and gross profit

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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*P6-12A You are given the following information about Meesha Novelty's inventory for the month of July. Purchases Sales Date Units Cost per unit Date Units Price per unit July 1 400 $3.00 July 2 300 $6.00 10 1,300 3.10 11 1,000 6.00 13 700 3.40 28 400 6.50 27 600 3.75 Instructions (a) Calculate the cost of goods available for sale and the number of units of ending inventory. (b) Assume Meesha uses FIFO periodic. Calculate the cost of ending inventory, cost of the goods sold, and gross profit. (c) Assume Meesha uses FIFO perpetual. Calculate the cost of ending inventory, cost of the goods sold, and gross profit. (d) Prepare journal entries to record the July 10 purchase and the July 11 sale using (1) FIFO periodic and (2) FIFO perpetual. Assume both the sale and purchase were for cash. (e) Compare the results of parts (b) and (c) above and comment.
Transcribed Image Text:*P6-12A You are given the following information about Meesha Novelty's inventory for the month of July. Purchases Sales Date Units Cost per unit Date Units Price per unit July 1 400 $3.00 July 2 300 $6.00 10 1,300 3.10 11 1,000 6.00 13 700 3.40 28 400 6.50 27 600 3.75 Instructions (a) Calculate the cost of goods available for sale and the number of units of ending inventory. (b) Assume Meesha uses FIFO periodic. Calculate the cost of ending inventory, cost of the goods sold, and gross profit. (c) Assume Meesha uses FIFO perpetual. Calculate the cost of ending inventory, cost of the goods sold, and gross profit. (d) Prepare journal entries to record the July 10 purchase and the July 11 sale using (1) FIFO periodic and (2) FIFO perpetual. Assume both the sale and purchase were for cash. (e) Compare the results of parts (b) and (c) above and comment.
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