P7-3 Comparing and Contrasting the Effects of Inventory Costing Methods on Financial Statement Elements LO7-2, 7-3 Neverstop Corporation sells item A as part of its product line. Information about the beginning inventory, purchases, and sales of item A are given in the following table for the first six months of the current year. The company uses a perpetual inventory system: Date January 1 (beginning inventory) January 24 February 8 March 16 June 11 Purchases Sales Number of Units Unit Cost Number of Units Sales Price 510 $2.70 310 $4.20 610 $2.80 310 $4.20 610 $2.80 Required: 1. Compute the cost of ending inventory by using the weighted-average costing method. (Do not round intermediate calculations and round the final answer to 2 decimal places.) Ending inventory 2. Compute the gross profit for the first six months of the current year by using the FIFO costing method. (Do not round intermediate calculations and round the final answer to 2 decimal places.) Gross profit 4. Prepare journal entries to record the purchase and sale transactions, as well as the cost of sales, assuming that all sales and purchase transactions are on account and that the weighted-average method is used. (Do not round intermediate calculations and round the final answers to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Answer is complete but not entirely correct. No Date General Journal 1 January 24 Accounts receivable Sales 2 January 24 Cost of sales Inventory Debit Credit 1,302.00 1,302.00 837.00 837.00 3 February 08 Inventory 1,708.00 Accounts payable 1,708.00 4 March 16 Accounts receivable Sales 1,302.00 1,302.00 5 March 16 Cost of sales Inventory 848.00 x 848.00 6 June 11 Inventory 1,708.00 Accounts payable 1,708.00