Read each question carefully and answer in the space provided below each question.

Question 3.1 Inventory and Sales (15 marks)

The Holly Corporation made the following merchandise purchases during the current year:

Date Qty Transaction Cost per unit

Jan. 1 380 Purchased at $15

Feb.14 180 Sold

May 1 270 Purchased at $20

June 10 320 Sold

July 5 300 Purchased at $24

Sept. 13 400 Sold

Oct. 1 250 Purchased at $30

There was no beginning inventory. Holly Corporation uses FIFO to estimate inventory and uses the perpetual inventory method.

a. Calculate the ending value of inventory on hand

b. Assuming the September 13 sales was at a selling price of $45 per unit on credit. Prepare the entries to record the sale on account and cost of goods sold on that date.

	Purchases			Sales (COGS)			Ending Inventory
Date	Quantity	Cost	Total	Quantity	Cost	Total	Quantity	Cost	Total

General Journal

Date	Accounts	Debit	Credit