Required information

Exercise 6-9 (Algo) Record transactions using a perpetual system (LO6-5) Littleton Books has the following transactions during May.

May 2	Purchases books on account from Readers Wholesale for $2,300, terms 2/10, n/30.
May 3	Pays cash for freight costs of $100 on books purchased from Readers.
May 5	Returns books with a cost of $300 to Readers because part of the order is incorrect.
May 10	Pays the full amount due to Readers.
May 30	Sells all books purchased on May 2 (less those returned on May 5) for $3,000 on account.

Exercise 6-9 (Algo) Part 1

Required:

1. Record the transactions of Littleton Books, assuming the company uses a perpetual inventory system. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

No	Date	General Journal	Debit	Credit
1	May 02	Inventory	2,300
		Accounts Payable		2,300
2	May 03	Inventory	100
		Cash		100
3	May 05	Accounts Payable	300
		Inventory		300
4	May 10	Accounts Payable	2,000
		Cash
		Inventory
5	May 30	Accounts Receivable	3,000
		Sales Revenue		3,000
6	May 30	Cost of Goods Sold
		Inventory

Exercise 6-9 (Algo) Part 2

2. Assume that payment to Readers is made on May 24 instead of May 10. Record this payment. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

No	Date	General Journal	Debit	Credit
1	May 24	Accounts Payable	2,000
		Cash

Problem 6-2A (Algo) Calculate ending inventory, cost of goods sold, sales revenue, and gross profit for four inventory methods (LO6-3, 6-4, 6-5)

George Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike for the month of March. George Bicycle Shop uses a periodic inventory system.

Date	Transactions	Units	Unit Cost	Total Cost
March 1	Beginning inventory	20	$160	$3,200
March 5	Sale ($220 each)	15
March 9	Purchase	10	180	1,800
March 17	Sale ($270 each)	8
March 22	Purchase	10	190	1,900
March 27	Sale ($295 each)	12
March 30	Purchase	8	210	1,680
				$8,580

For the specific identification method, the March 5 sale consists of bikes from beginning inventory, the March 17 sale consists of bikes from the March 9 purchase, and the March 27 sale consists of four bikes from beginning inventory and eight bikes from the March 22 purchase.

Required:

1. Calculate ending inventory and cost of goods sold at March 31, using the specific identification method. 2. Using FIFO, calculate ending inventory and cost of goods sold at March 31. 3. Using LIFO, calculate ending inventory and cost of goods sold at March 31. 4. Using weighted-average cost, calculate ending inventory and cost of goods sold at March 31. 5. Calculate sales revenue and gross profit under each of the four methods. 6. Comparing FIFO and LIFO, which one provides the more meaningful measure of ending inventory? 7. If George Bicycle Shop chooses to report inventory using LIFO instead of FIFO, record the LIFO adjustment.

Calculate ending inventory and cost of goods sold at March 31, using the specific identification method.

Ending inventory
Cost of goods sold

Using FIFO, calculate ending inventory and cost of goods sold at March 31.

Ending inventory
Cost of goods sold

Using LIFO, calculate ending inventory and cost of goods sold at March 31.

Ending inventory
Cost of goods sold

Using weighted-average cost, calculate ending inventory and cost of goods sold at March 31. (Round your intermediate calculations to 4 decimal places and final answers to 2 decimal places.)

Ending inventory
Cost of goods sold

Calculate sales revenue and gross profit under each of the four methods. (Round weighted-average unit cost amounts to 4 decimal places.)

	Specific Identification	FIFO	LIFO	Weighted-average Cost
Sales revenue
Gross profit