ABBA uses the perpetual inventory system. The following transactions took place in January 2015.

Required:
1. Assume ABBA uses the FIFO inventory cost flow assumption
a. Record the journal entry for the January 5 sale. Show calculations for cost of goods sold.
b. Record the journal entry for the January 16 sale. Show calculations for cost of goods sold.
c. Calculate ending inventory in units, cost per unit, and total cost.
2. Assume ABBA uses the weighted average inventory cost flow assumption
a. Record the journal entry for the January 5 sale. Show calculations for cost of goods sold.
b. Record the journal entry for the January 16 sale. Show calculations for cost of goods sold.
c. Calculate ending inventory in units, cost per unit, and total cost.

Transcribed Image Text:

Unit Selling Price/ Date Units Cost Jan. 1 Opening Inventory 2,000 $0.50 1,200 5.00 1,000 2.00 500 1.00 2,000 6.00 1,000 2.50 5 10 16 21 Sale #1 Purchase #1 Purchase #2 Sale #2 Purchase #3