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Concept explainers
Faithful Books has the following transactions in August related to merchandise inventory.
Determine the cost of goods sold and ending merchandise inventory by preparing a perpetual inventory record using the specific identification method. Assume the following costing information for the books sold during the month:
August 3: |
10 books costing $18 each |
|
August 15: |
4 books costing $18 each and 9 books costing $21each |
|
August 28: |
2 books costing $21each and 2 books costing $28 each |
Aug. 1 Beginning merchandise inventory, 16 books @ $18 each
Aug. 3 Sold 10 books @ $21 each
Aug. 12 Purchased 12 books @ $21 each
Aug. 15 Sold 13 books @ $21 each
Aug. 20 Purchased 3 books @ $28 each
Aug. 28 Sold 4 books @ $22 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 merchandise inventorypurchased, sold, and on hand at the end of the period.
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