Campbell Candy Company starts the month of January with 40 boxes of Tiger Bars costing $20 each. The following transactions occurred during the month:
Jan. 2 Purchased 15 additional boxes for $22 each. Paid with cash.
Jan. 4 Paid freight costs of $30 on January 2 purchase.
Jan. 10 Sold 45 boxes for $40 each.
Jan. 27 Purchased 10 additional boxes on account for $23 each.
Campbell uses a perpetual inventory system and the FIFO inventory costing method.
a. Prepare all necessary journal entries related to Campbell's inventory activity.
b. Suppose that the inventory has a replacement value of $375 at the end of the month. What entry, if any, is required?