Prepare a perpetual inventory record for this merchandise, using the first in, first out (FIFO) method of inventory valuation to determine BAYWEST’s cost of goods sold for the quarter and the value of ending.
BAYWEST Stationery & Supplies located in Montego Bay, Jamaica, sells a variety of school supplies including several brands of tablets. The business uses a perpetual inventory system and adjusts cost of goods sold for any shortage or excess inventory. BAYWEST began the third quarter (July to September) of 2020 with 30 (Alcatel) tablets at a total cost of $187,800. During the quarter, with the onset of the COVID-19 pandemic, the business completed the following transactions relating to the “Alcatel” tablets.
July 8: 98 tablets were purchased at a cost of $6,202 each. In addition, the business paid a freight charge of $248 cash on each tablet to have the inventory shipped from the point of purchase to their warehouse.
July 31: The sales for July were 85 tablets which yielded total sales revenue of $809,030. (25 of these tablets were sold on account to longstanding customers)
August 4: A new batch of 67 tablets was purchased at a total cost of $465,650
August 10: 5 of the tablets purchased on August 4 were returned to the supplier, as they were not of
the model ordered.
August 31: During the month 60 tablets were sold at a price of $10,350 each.
September 4: A customer, to whom 9 tablets were sold during the first business day of August, returned
3 of the instruments, as they were of another brand.
September 10: Owing to an increased demand, a further 115 tablets were purchased at a cost of $7,900
each; these were subject to a trade discount of 2% each.
September 30: 121 tablets were sold during September at a unit selling price of $11,085.
September 30: An actual count of inventory was carried out which revealed that there were 34 units of the “Alcatel” brand of merchandise in the store room.
Unless otherwise stated, assume that all purchases were on
Required:
a. Prepare a perpetual inventory record for this merchandise, using the first in, first out (FIFO) method of
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