Chapter 6, Problem 6.4SE

Use the following information to answer Short Exercises S6-3 through S6-6.

Montana Cycles started July with 25 bicycles that cost $36 each. On July 16, Montana bought 35 bicycles at $60 each. On July 31, Montana sold 33 bicycles for $105 each.

Preparing a perpetual inventory record and journal entries-FIFO

Requirements

1. 1. Prepare Montana Cycle’s perpetual inventory record assuming the company uses the FIFO inventory costing method.
2. 2. Journalize the July 16 purchase of merchandise inventory on account and the July 31 sale of merchandise inventory on account.