Shepherd Cycles started

July

with

5

bicycles that cost

$48

each. On

July 16,

Shepherd

purchased

30

bicycles at

$55

each. On

July 31,

Shepherd

sold

23

bicycles for

$105

each.

Requirements

1.	Prepare Shepherd Cycle's perpetual inventory record assuming the company uses the specific identification inventory costing method. Assume that Shepherd sold 3 bicycles that cost $48 each and 20 bicycles that cost $55 each.
2.	Journalize the July 16 purchase of merchandise inventory on account and the July 31 sale of merchandise inventory on account.

Requirement 1. Prepare

Shepherd

Cycle's perpetual inventory record assuming the company uses the specific identification inventory costing method. Assume that

Shepherd

sold

3

bicycles that cost

$48

each and

20

bicycles that cost

$55

each.

Start by entering the beginning inventory balances. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first. Abbreviation used: QTY = Quantity; Tot. = Total)

Shepherd Cycles
	Purchases			Cost of Goods Sold			Inventory on Hand
Date	QTY	Unit Cost	Tot. Cost	QTY	Unit Cost	Tot. Cost	QTY	Unit Cost	Tot. Cost
Jul. 1

Jul. 16

Jul. 31

Totals

Requirement 2. Journalize the

July 16

purchase of merchandise inventory on account and the

July 31

sale of merchandise inventory on account. (Record debits first, then credits. Select the explanation on the last line of the journal entry table. Check your spelling carefully and do not abbreviate.)

July 16:

Purchased merchandise inventory on account.

Date		Accounts and Explanation	Debit	Credit
Jul.	16

July 31:

Sale of merchandise inventory on account.Begin by preparing the entry to journalize the sale portion of the transaction. Do not record the expense related to the sale. We will do that in the following step. (Assume that

Shepherd

sold the bicycles for

$105

each.)

Date		Accounts and Explanation	Debit	Credit
Jul.	31

Now journalize the expense related to the

July

31 sale.Review the perpetual inventory record you prepared in Requirement 1.

LOADING...

Date		Accounts and Explanation	Debit	Credit
Jul.	31