Question 1 Bonita Company sells one product. Presented below is information for
ID: 2568941 • Letter: Q
Question
Question 1 Bonita Company sells one product. Presented below is information for January for Bonita Company.
Jan. 1: Inventory 111 units at $5 each
Jan 4 :Sale 90 units at $8 each
Jan 11: Purchase 159 units at $6 each
Jan 13: Sale 130 units at $9 each
Jan 20: Purchase 149 units at $7 each
Jan 27: Sale 85 units at $11 each
Bonita uses the FIFO cost flow assumption. All purchases and sales are on account. Assume Bonita uses a perpetual system. Prepare all necessary journal entries, including the end-of-month closing entry to record cost of goods sold. A physical count indicates that the ending inventory for January is 114 units.
please also provide gross profit:
Explanation / Answer
Date
Accounts title and explanation
Debit
Credit
Jan-04
Accounts Receivable
720
Sales (90*8)
720
Jan-11
Purchases
954
Accounts Payable (159*6)
954
Jan-13
Accounts Receivable
1170
Sales (130*9)
1170
Jan-20
Purchases
1043
Accounts Payable (149*7)
1043
Jan-27
Accounts Receivable
935
Sales (85*11)
935
Jan-31
Inventory (7*114)
798
Cost of Goods sold (111*5) + (954+1043) - (798)
1754
Purchases
1997
Inventory
555
Sales (720+1170+935)
2825
Less: Cost of Goods Sold
1754
Gross Profit
1071
Date
Accounts title and explanation
Debit
Credit
Jan-04
Accounts Receivable
720
Sales (90*8)
720
Jan-11
Purchases
954
Accounts Payable (159*6)
954
Jan-13
Accounts Receivable
1170
Sales (130*9)
1170
Jan-20
Purchases
1043
Accounts Payable (149*7)
1043
Jan-27
Accounts Receivable
935
Sales (85*11)
935
Jan-31
Inventory (7*114)
798
Cost of Goods sold (111*5) + (954+1043) - (798)
1754
Purchases
1997
Inventory
555
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