(Periodic versus Perpetual Entries) Chippewas Company sells one product. Presented below is information for January for Chippewas Company.
|
Jan. 1 Inventory |
100 units at $6 each |
|
4 Sale |
80 units at $8 each |
|
11 Purchase |
150 units at $6.50 each |
|
13 Sale |
120 units at $8.75 each |
|
20 Purchase |
160 units at $7 each |
|
27 Sale |
100 units at $9 each |
Chippewas uses the FIFO cost flow assumption. All purchases and sales are on account.
Instructions
(a) Assume Chipper was uses a periodic system. Prepare all necessary journal entries, including the end of month closing entry to record cost of goods sold. A physical count indicates that the ending inventory for January is 110 units.
(b) Compute gross profit using the periodic system.
(c) Assume Chipper was uses a perpetual system. Prepare all necessary journal entries.
(d) Compute gross profit using the perpetual system.