Question

Daniel Company uses the perpetual inventory system to account for its merchandise. The beginning balance of the inventory and its transactions during January were as follows: January 1: Beginning Balance of 18 units at $13 each January 12: Purchased 15 units at $14 each January 19: Sold 24 units at a selling price of $28 each January 20: Purchased 24 units at $17 each January 27: Sold 27 units at a selling price of $32 each If the company uses the FIFO inventory method, what would be the Gross Profit for the month of January

Answer 1

Gross profit for January = $786

Step-by-step explanation:

Particulars Units Rate Amount

Sales on 19th 24 $28 $672

Sales on 27th 27 $32 $864

Closing Balance 6 $17 $102

Total $1,638

Particulars Units Rate Amount

Opening 18 $13 $234

Purchases on Jan 12th 15 $14 $210

Purchases on Jan 20th 24 $17 $408

Gross Profit $786

Total $1,638