California Cycles started May with 5 bicycles that cost $48 each. On May 16, California bought 30 bicycles at $55 each. On May 31, California sold 29 bicycles for $95 each. Requirements 1. Prepare California Cycle's perpetual inventory record assuming the company uses the FIFO inventory costing method. 2. Journalize the May 16 purchase of merchandise inventory on account and the May 31 sale of merchandise inventory on account. Requirement 1. Prepare California Cycle's perpetual inventory record assuming the company uses the FIFO inventory costing method. Start by entering the beginning inventory balances. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first. Abbreviation used: QTY = Quantity; Tot. = Total) California Cycles Purchases Cost of Goods Sold QTY Unit Cost Tot. Cost Inventory on Hand QTY Unit Cost Tot. Cost QTY Unit Cost Tot. Cost Date May 1 May 16 May 31 Totals Requirement 2. Journalize the May 16 purchase of merchandise inventory on account and the May 31 sale of merchandise inventory on account. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) May 16: Purchased merchandise inventory on account. Date Accounts and Explanation Debit Credit May 16 May 31: Sale of merchandise inventory on account. Begin by preparing the entry to journalize the sale portion of the transaction. Do not record the expense related to the sale. We will do that in the following step. (Assume that California sold the bicycles for $95 each.) Date L Accounts and Explanation Debit Credit May 31 Now journalize the expense related to the May 31 sale. Review the perpetual inventory record you prepared in Requirement 1. Date Accounts and Explanation Debit Credit May 31