Question #2 - Calculate cost of goods sold and ending inventory in a perpetual inventory system using the specific identification, FIFO, and weighted average methods of cost determination. (14 marks)

Fly Company uses a perpetual inventory system. Beginning inventory is 2,500 T-shirts at a cost $ 2.50 per shirt. During the year Fly had the following inventory transactions:

Jan 12	Purchased	500 units @ $ 2.15 per unit
Feb 18	Sold	1,350 units @ $ 6.50 per unit
Jul 1	Purchased	1,000 units @ $ 2.65 per unit
Aug 29	Sold	1,475 units @ $ 7.50 per unit
Dec 19	Purchased	500 units @ $ 3.05 per unit

All purchases and sales are on account.

Required:

a) Calculate the cost of goods sold and ending inventory using weighted average. Round per unit amounts to two decimal places.

b) Prepare journal entries to record the February 18 and the August 29 sales. All sales and purchases are made in cash.