A company that uses a perpetual inventory system made the following cash purchas

Question

A company that uses a perpetual inventory system made the following cash purchases and sales. There was no beginning inventory.

January 1:

Purchased 100 units at $10 per unit

February 5:

Purchased 60 units at $12 per unit

March 16:

Sold 40 Units for $16 per unit

Prepare general journal entries to record the March 16 sale using the FIFO inventory valuation method.

January 1:

Purchased 100 units at $10 per unit

February 5:

Purchased 60 units at $12 per unit

March 16:

Sold 40 Units for $16 per unit

Explanation / Answer

Particulars DR CR Cash 40*16 640 Cost Of goods sold(40*10) 400 Sales 640 Inventory 400

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