FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Chipolo sells a coin-sized tracking tag that attaches to keys, wallets, and other personal items. Chipolo began January with an inventory of 200 tags purchased from its supplier in November last year at a cost of $12 per tag, plus 100 tags purchased in December last year at a cost of $15 per tag. Chipolo sells the tags at a price of $30 per tag, on account with terms n/30, FOB destination. Chipolo uses a perpetual inventory system to account for the following transactions.
| Jan. | 8 | Chipolo gave 250 tags to a courier company (FedEx) to deliver to customers. | ||
| Jan. | 9 | FedEx confirmed that all 250 tags were delivered today to customers. | ||
| Jan. | 11 | Chipolo ordered 350 tags from its supplier. The supplier was out of stock but promised to send them to Chipolo as soon as possible. Chipolo agreed to a cost of $21 per tag, n/30. | ||
| Jan. | 17 | Chipolo received cash payment from customers for 125 of the tags delivered 8 days earlier. | ||
| Jan. | 21 | The 350 tags ordered on January 11 were shipped to and received by Chipolo today. | ||
| Jan. | 23 | Chipolo gave 375 tags to FedEx, which were delivered “same day” to customers. | ||
| Jan. | 31 | Chipolo counted its inventory and determined 20 tags were on hand. Chipolo made a “book-to-physical adjustment” to account for the missing 5 tags. |
FIFO METHOD- journal entries
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