Chapter 6, Problem 6.39PS

Accounting for inventory using the perpetual inventory system-FIFO

Consider the December transactions for Crystal Clear Cleaning that were presented in Chapter 5. (Cost data have been removed from the sale transactions.) Crystal Clear uses the perpetual inventory system.

Dec. 2	Purchased 475 units of inventory for $2,850 on account from Sparkle, Co. on terms, 3/10, n/20.
5	Purchased 600 units of inventory from Borax on account with terms 2/1 0, n/30. The total invoice was for $4,500, which included a $150 freight charge.
7	Returned 75 units of inventory to Sparkle from t he December 2 purchase.
9	Paid Borax.
11	Sold 285 units of goods to Happy Maids for $3,990 on account with terms 3/10, n/30.
12	Paid Sparkle.
15	Received 22 units with a retail price of $308 of goods back from customer Happy Maids. The goods cost Crystal Clear $132.
21	Received payment from Happy Maids, settling the amount due in full.
28	Sold 265 units of goods to Bridget, Inc. for cash of $3,975.
29	Paid cash f or utilities of $415.
30	Paid cash for Sales Commission Expense of $550.
31	Recorded the following adjusting entries:
	a. Physical count of inventory on December 31 showed 428 units of goods on hand.
	b. Depreciation, $270
	c. Accrued salaries expense of $725
	d. Prepared all other adjustments necessary for December (Hint: You will need to review the adjustment information in Chapter 3 to determine the remaining adjustments). Assume the cleaning supplies left at December 31 are $30.

Requirements

1. 1. Prepare perpetual inventory records for December for Crystal Clear Cleaning using the FIFO inventory costing method. (Note: You must calculate the cost of goods sold on the 11th, 28th, and 31st.)
2. 2. Journalize the transactions for December 11th, 28th, and 31st (adjusting entry a only) using the perpetual inventory record created in Requirement 1.