Shepherd Cycles started July with 15 bicycles that cost $75 each. On July 16, Shepherd purchased 25 bicycles at $91 each. On July 31, Shepherd sold 20 bicycles for $110 each. Requirements 1. Prepare Shepherd Cycle's perpetual inventory record assuming the company uses the specific identification inventory costing method. Assume that Shepherd sold 10 bicycles that cost $75 each and 10 bicycles that cost $91 each. 2. Journalize the July 16 purchase of merchandise inventory on account and the July 31 sale of merchandise inventory on account. Requirement 1. Prepare Shepherd Cycle's perpetual inventory record assuming the company uses the specific identification inventory costing method. Assume that Shepherd sold 10 bicycles that cost $75 each and 10 bicycles that cost $91 each. Start by entering the beginning inventory balances. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first. Abbreviation used: QTY = Quantity; Tot. = Total) Shepherd Cycles Date Jul. 1 Purchases Unit Tot. QTY Cost Cost Cost of Goods Sold Unit Tot. QTY | Cost Cost Inventory on Hand Unit Tot. QTY Cost Cost

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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Shepherd Cycles started July with

bicycles that cost

$75

each. On

July 16,

Shepherd

purchased

bicycles at

$91

each. On

July 31,

Shepherd

sold

bicycles for

$110

each.

Requirements

1.	Prepare Shepherd Cycle's perpetual inventory record assuming the company uses the specific identification inventory costing method. Assume that Shepherd sold 10 bicycles that cost $75 each and 10 bicycles that cost $91 each.
2.	Journalize the July 16 purchase of merchandise inventory on account and the July 31 sale of merchandise inventory on account.

Shepherd Cycles started July with 15 bicycles that cost $75 each. On
July 16, Shepherd purchased 25 bicycles at $91 each. On July 31,
Shepherd sold 20 bicycles for $110 each.
Requirements
1. Prepare Shepherd Cycle's perpetual inventory record assuming
the company uses the specific identification inventory costing
method. Assume that Shepherd sold 10 bicycles that cost $75
each and 10 bicycles that cost $91 each.
2.
Journalize the July 16 purchase of merchandise inventory on
account and the July 31 sale of merchandise inventory on
account.
Requirement 1. Prepare Shepherd Cycle's perpetual inventory record
assuming the company uses the specific identification inventory costing
method. Assume that Shepherd sold 10 bicycles that cost $75 each and
10 bicycles that cost $91 each.
Start by entering the beginning inventory balances. Enter the
transactions in chronological order, calculating new inventory on hand
balances after each transaction. Once all of the transactions have been
ed into the perpetual record, calculate quantity and total cost of
inventory purchased, sold, and on hand at the end of the period. (Enter
the oldest inventory layers first. Abbreviation used: QTY = Quantity;
Tot. = Total)
Shepherd Cycles
Purchases
Unit
Tot.
Date QTY Cost Cost
Jul. 1
Cost of Goods
Sold
Inventory on Hand
Unit Tot.
Unit Tot.
QTY Cost Cost QTY Cost Cost

Expert Solution

Step 1

A perpetual inventory system is a system that tracks and keeps records of the inventory on a real-time basis electronically without the need for physical inventory. In this system, inventory gets updated automatically whenever the goods are purchased or sold, any purchase or sales return records are also immediately updated. This system is helpful in accurately recording the inventory data in comparison to the manual system of recording. Large businesses like grocery stores or departmental stores use a perpetual system of inventory recording.

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