E6-29B. (Learning Objectives 2, 3: Analyzing inventory transactions under FIFO costing)

Riva’s, Inc.’s inventory records for a particular development program show the following at May 31:

At May 31, 10 of these programs are on hand. Journalize for Riva’s:
1. Total May purchases in one summary entry. All purchases were on credit.
2. Total May sales and cost of goods sold in two summary entries. The selling price was $640 per unit and all sales were on credit. Assume that Riva’s uses the FIFO inventory method and the sale took place on May 28.
3. Under FIFO, how much gross profit would Riva’s earn on these transactions? What is the FIFO cost of Riva’s, Inc.’s ending inventory?

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May 1 15 26 Purchase. Beginning inventory Purchase. 8 units @ $150 = $1,200 5 units @ $150 = 750 13 units @ $160 = 2,080