Question
Flamborough Wholesale Inc. had the following inventory transactions for one month. The company uses a perpetual system and FIFO. All purchases and sales are on
Flamborough Wholesale Inc. had the following inventory transactions for one month. The company uses a perpetual system and FIFO. All purchases and sales are on account.
| # of | unit cost or | ||
| items | sale price | ||
| August 1 | Opening balance | 60 | $18 |
| August 5 | Purchase | 40 | $20 |
| August 7 | Purchase of August 5 items returned | -5 | |
| August 10 | Sale | 75 | $40 |
| August 12 | Purchase | 25 | $24 |
| August 17 | Sale | 20 | $50 |
| August 24 | Purchase | 35 | $25 |
REQUIRED:
Use an inventory cost chart and an accounting chart to analyze the above transactions, and then answer the questions below.
What amount of cost of goods sold will be recorded on August 17?
What is the value of the inventory after the August 17 transaction?
What is the gross profit percentage on the August 17 sale?
What is the amount of gross profit on the August 17 sale?
What is the value of the inventory after the August 24 transaction?
What is the total revenue for the month?
What is the total gross profit for the month? (2 marks)
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Survey Of Accounting
Authors: Carl S. Warren
2nd Edition
0324183445, 978-0324183443
