Una Company opened a new store in February this year. During the first year of operations, the company made the following purchases and sales:

Instructions
(a) Calculate the cost of goods available for sale and the number of units of ending inventory.
(b) Assume Una uses FIFO periodic. Calculate the cost of ending inventory, cost of the goods sold, and gross profit.
(c) Assume Una uses FIFO perpetual. Calculate the cost of ending inventory, cost of the goods sold, and gross profit.
(d) Prepare journal entries to record the April 12 purchase and the April 30 sale using
(1) FIFO periodic and
(2) FIFO perpetual. Assume all transactions were on account.
(e) Compare the results of (b) and (c) above and comment.
Taking It Further
If a company uses the FIFO cost determination method, are there any benefits to using FIFO perpetual over FIFO periodic? Explain.

Transcribed Image Text:

Purchases Sales Price $120 $160 Units Date Units Date Feb. 7 Apr. 12 July 18 Apr. 30 Nov. 12 $100 $120 $130 $150 2 9 Oct. 26