Question

Wifty Company sells one product. Presented below is information for January for Swifty Company.

Jan. 1 Inventory 103 units at $5 each
4 Sale 82 units at $8 each
11 Purchase 135 units at $7 each
13 Sale 102 units at $9 each
20 Purchase 167 units at $7 each
27 Sale 108 units at $11 each

Swifty uses the FIFO cost flow assumption. All purchases and sales are on account.

Assume Wifty Company uses a periodic 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 119 units.

Answer 1

Step-by-step explanation:

Wifty Company

Jan 4: Cr. Sales (82 * $8) $164

Dr. Acc receivable. $164

Being sales on account

Jan 11: Dr.Acc payable(135*$7) $945

Cr: Purchases. $945

Being purchases on account

Jan 13: Cr Sales. (102 * $9). $918

Dr Acc receivable $918

Being sales on account

Jan 20:Dr.Acc payable. $1,169

Cr:Purchases(167*$7)$1,169

Being purchases on account

Jan 27:Cr Sales. (108 * $11). $1,188

Dr Acc receivable $1,188

Being sales on account

Periodic table

Date. Description. Amount

Jan 1. Opening. (130 * $5) $515

Jan 4. Sales. (82 * $8) ($164)

Jan 11 Purchases. (135 * $7) $945

Jan 13 Sales. (102 * $9). ($918)

Jan 20 Purchases. (167*$7). $1,169

Jan 27 Sales. (108 * $11). ($1,188)

Closing inventory. $359

Beginning inventory + Purchases = Cost of goods available for sale

= $515 +$945 + $1169= $2,629

Cost of goods available for sale – Ending inventory = Cost of goods sold = $2,629 - $359 = $2,270