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Idaho Inc. is a wholesale company selling special parts for the automotive industry. The company uses FIFO and a perpetual inventory system. Its inventory records
Idaho Inc. is a wholesale company selling special parts for the automotive industry. The company uses FIFO and a perpetual inventory system. Its inventory records for part SA-123 show the following transactions for the month of May 2020:
Date | Transaction | Units | Unit | Units | Unit |
|
| Purchased | Cost | Sold | Selling |
|
|
|
|
| Price |
May 1 | Balance | 180 | $10.50 |
|
|
May 10 | Purchase | 750 | $10.80 |
|
|
May 15 | Sale |
|
| (150) | $18.60 |
May 20 | Purchase | 150 | $11.03 |
|
|
May 21 | Sale |
|
| (225) | $18.75 |
May 23 | Purchase | 375 | $11.10 |
|
|
Instructions
- Assuming Idaho makes all sales and purchases of inventory on account, prepare the journal entries for each of the above listed transactions.
- Now assume Idaho uses the average cost method, prepare the journal entries.
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