Date Account Titles and Explanation Debit Credit Jan. 31 Date Account Titles and

Question

Date

Account Titles and Explanation

Debit

Credit

Jan. 31

Date

Account Titles and Explanation

Debit

Credit

(To record the sale)

(To record the cost of inventory)

(To record the sale)

(To record the cost of inventory)

(To record the sale)

(To record the cost of inventory)

Pharoah Company sells one product. Presented below is information for January for Pharoah Company.
Jan. 1 Inventory 121 units at $4 each 4 Sale 100 units at $8 each 11 Purchase 159 units at $6 each 13 Sale 126 units at $9 each 20 Purchase 175 units at $7 each 27 Sale 114 units at $11 each
Pharoah uses the FIFO cost flow assumption. All purchases and sales are on account.

Explanation / Answer

Journal entries under periodic inventory system Date Account titles and explanations Debit Credit Jan-01 No entry Jan-04 Accounts receivables 800 sales 800 (100*8) (recorded sales on account) Jan-11 Purchases 954 Accounts payable 954 (159*6) (Recorded purchase on account) Jan-13 Accounts receivables 1134 sales 1134 (126*9) (recorded sales on account) Jan-20 Purchases 1225 Accounts payable 1225 (175*7) (Recorded purchase on account) Jan-27 Accounts receivables 1254 sales 1254 (114*11) (recorded sales on account) Jan-31 Merchandise inventory 805 Purchases 805 (note:1) (value of ending inventory recorded) Jan-31 Cost of goods sold 1858 Purchases 1858 (Being cost of goods sold accounted0 Notes 1. Computation of ending inventory under periodic inventory method; Units Rate Cost Opening balance 121 4 484 Add:purchases 159 6 954 175 7 1225 455 2663 less: sales (100+126+114) 340 121 4 484 Cost of goods sold=1858 159 6 954 Ending inventory=805 60 7 420 340 1858 Ending inventory 115 7 805 (175-60) Journal entries under perpetual inventory system Date Account titles and explanations Debit Credit Jan-01 No entry Jan-04 Accounts receivables 800 sales 800 (100*8) (recorded sales on account) Cost of goods sold 400 Merchandise inventory 400 (100*4) (being cost of goods sold recorded) Jan-11 Purchases 954 Accounts payable 954 (159*6) (Recorded purchase on account) Jan-13 Accounts receivables 1134 sales 1134 (126*9) (recorded sales on account) Cost of goods sold 714 Merchandise inventory 714 (21*4)+[(126-21)*6] (being cost of goods sold recorded) Jan-20 Purchases 1225 Accounts payable 1225 (175*7) (Recorded purchase on account) Jan-27 Accounts receivables 1254 sales 1254 (114*11) (recorded sales on account) Cost of goods sold 747 Merchandise inventory 747 (51*6)+[(114-51)*7] (being cost of goods sold recorded) Notes 1. Computation of ending inventory under perpetual inventory method; cost of goods sold=400+714+747=1861 Total purchases=(159*6)+(175*7)=2663 Ending inventory=beginning inventory+Purachases-Cost of goods sold=484+2663-1861=1286

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.