Monrose Park had the following transactions during the month of November 2018.

Nov 2 Purchased 1,000 widgets for $20 per unit on credit

Nov 5 Sold 900 widgets for $55 each for cash

Nov 10 Purchased 500 widgets for $25 per unit on credit

Nov 18 Sold 100 widgets for $60 each on credit

Nov 29 Sold 300 widgets for $50 each for cash

Monrose Park uses a perpetual inventory system and the FIFO inventory valuation method. There were no widgets in the companys opening inventory for November.

a) Record the above transactions in the general journal.

Date	Account Title and Explanation	Debit	Credit

b) Prepare the schedule to calculate ending inventory after the above transactions.

Date	Purchases			Sales			Balance
	Quantity	Unit Cost	Value	Quantity	Unit Cost	Value	Quantity	Unit Cost	Value
Nov 1
Nov 2
Nov 5
Nov 10
Nov 18
Nov 29
Ending Inventory

c) Calculate the value of merchandise inventory using the lower of cost and net realizable value (LCNRV).

				LCNRV Applied to
Description	Category	Cost	NRV	Individual	Category
Widget A	Widgets	$3,000	$2,300
Widget B	Widgets	2,000	3,300
Total widgets
Total

d) Record the journal entry to adjust the value of merchandise inventory to the lower of cost and net realizable value based on individual items using the results from c).

Date	Account Title and Explanation	Debit	Credit

e) Prepare an excerpt of the multiple-step income statement for the month showing sales revenue, cost of goods sold, and gross profit.

f) Sales for December were $100,000 and purchases were $68,500. Using the gross profit method, estimate the closing value of inventory. Assume the gross profit margin from November will be the gross profit margin for December.

Sales Revenue		$100,000
Cost of Goods Sold
Opening Inventory
Purchases	68,500
Cost of Goods Available for Sale
Closing Inventory
Cost of Goods Sold
Gross Profit