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JackJoe, Inc. sells toy mice to high-end toy stores. JackJoe uses a periodic inventory system and uses LIFO to value ending inventory. Following is JackJoe's
JackJoe, Inc. sells toy mice to high-end toy stores. JackJoe uses a periodic inventory system and uses LIFO to value ending inventory. | |||||||
Following is JackJoe's inventory activity for January. The toy mice on hand at January 1 had a unit cost of $1. Select a variable (X) for the January 28th sale, a number between 10 and 75. | |||||||
Date | Purchases | Sales | Units on Hand | ||||
1-Jan | 50 | ||||||
5-Jan | 150 units @ $2 each | 200 | |||||
16-Jan | 150 units @ $100 each | 50 | |||||
23-Jan | 50 units @ $3 each | 100 | |||||
28-Jan | X units @ $100 each | ? | |||||
(a) | Prepare the inventory analysis for January and write the adjusting journal entry for inventory. and How much is gross profit for January? | ||||||
(b) | If JackJoe used FIFO, would gross profit be greater, equal or less than gross profit using LIFO? Why? |
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