Assume ABBA uses the FIFO method of valuing inventory within a Periodic Inventory System. Record Journal Entries for the Purchases and sales of inventory using the Periodic Inventory System. Determine the quantity, price and total value of the Ending Inventory using the FIFO Method. Make a journal entry to record the Ending Inventory and close out the purchases account to inventory.

ABBA
Analysis of Inventory
January Purchase and Sale Activity
Valuing Ending Inventory
Periodic Inventory
FIFO Method
	Date	Transaction Description	Units	Unit Cost
	1-Jan	Opening Balance	2,000	$ 0.50
	5-Jan	Sale #1		1,200	$ 5.00
	6-Jan	Purchase 1		1,000	$ 2.00
	10-Jan	Purchase 2		500	$ 1.00
	16-Jan	Sale #2		2,000	$ 6.00
	21-Jan	Purchase 3		1,000	$ 2.50
a.	Record the purchases and sales above in the General Journal below:

Date	Transaction Description	Debit	Credit

b.	How many units of Inventory are left in Ending Inventory?
	What is the Unit Price(s) that will be used to determine FIFO Ending Inventory?
	Calculate the value of Ending Inventory using the units and price(s) noted above.

c.	Make the journal entry below to record Ending Inventory under the FIFO/Periodic Inventory Method:

Date	Transaction Description	Debit	Credit

Answer rating: 100% (QA)

a Record of Purchases and Sales General Journal Date Transaction Description Debit Credit 1Jan Openi... View the full answer