An inventory count of shampoo/conditioner reveals that 17 bottles remain in inventory. Any lost inventory is recorded as cost of merchandise sold.

Journalize the above adjusting entry using the information below:

Use the following transactions to complete the first month of the Billy Bobs Barber Shop.

There should also be a second entry to account for the cost of merchandise sold and reduction of inventory using the FIFO method.

Feb. 1 Billy Bob purchased 40 bottles of shampoo/conditioner for $5/each. The bottles of shampoo/conditioner are to be held for resale. Billy uses the perpetual method. Billy uses the FIFO method to account for inventory.

8. Sold 22 bottles of the shampoo/conditioner at a price of $10/bottle receiving cash.

10. Billy Bob purchased 20 bottles of shampoo/conditioner for $5.50/each. The bottles of shampoo/conditioner are to be held for resale.

16. Sold 25 bottles of the shampoo/conditioner at a price of $12/bottle receiving cash

25. Purchased 20 bottles of shampoo/conditioner on account. The price was $6/each.The bottles of shampoo/conditioner are to be held for resale.

26. Sold 15 bottles of the shampoo/conditioner at a price of $10/bottle receiving cash

ANSWER-

Date	Account Titles	Debit	Credit
Feb-01	Merchandise Inventory	$ 200.00		=40*5
	Accounts Payable		$ 200.00
Feb-08	Accounts Receivable	$ 220.00		=22*10
	Sales Revenue		$ 220.00
	Cost of Goods Sold	$ 110.00		=22*5
	Inventory		$ 110.00
Feb-10	Merchandise Inventory	$ 110.00		=20*5.5
	Accounts Payable		$ 110.00
Feb-16	Accounts Receivable	$ 300.00		=25*12
	Sales Revenue		$ 300.00
	Cost of Goods Sold	$ 128.50		=18*5+7*5.5
	Inventory		$ 128.50
Feb-25	Merchandise Inventory	$ 120.00		=20*6
	Accounts Payable		$ 120.00
Feb-26	Accounts Receivable	$ 150.00		=15*10
	Sales Revenue		$ 150.00
	Cost of Goods Sold	$ 83.50		=13*5.5+2*6
	Inventory		$ 83.50