Washington Cycles started January with 25 bicycles that cost $65 each. On January 16, Washington purchased 50 bicycles at $80 each. On January 31, Washington sold 44 bicycles for $96 each. Requirements

1.	Prepare Washington Cycle's perpetual inventory record assuming the company uses the FIFO inventory costing method.
.	Journalize the January 16 purchase of merchandise inventory on account and the January 31 sale of merchandise inventory on account.

Question content area bottom

Part 1

Requirement 1. Prepare

Washington

Cycle's perpetual inventory record assuming the company uses the FIFO inventory costing method.

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)

Washington 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
Jan. 1

Part 2

Jan. 16

Part 3

Jan. 31

Part 4

Totals

Part 5

Requirement 2. Journalize the

January 16

purchase of merchandise inventory on account and the

January 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.)

January 16:

Purchased merchandise inventory on account.

Date		Accounts and Explanation	Debit	Credit
Jan.	16

Part 6

January 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

Washington

sold the bicycles for

$96

each.)

Date		Accounts and Explanation	Debit	Credit
Jan.	31

Part 7

Now journalize the expense related to the

January

31 sale.