Good morning,
The following data regarding purchases and sales of a commodity were taken from the related perpetual inventory account:
6/1 balance... 25 units at $50
6/6 sale... 20 units
6/8 purchase... 20 units at $51
6/16 sale... 10 units
6/20 purchase... 20 units at $52
6/23 sale... 25 units
6/30 purchase... 15 units at $53
A) determine the cost of inventory balance at 6/30, using (1) the first in , first out method and (2) the last in, first out method. Identify the quantity, unit price, and total cost of each lot in the inventory.
B) Present the journal entry to record a shortage (shrinkage) of $53 discovered by the physical count on 6/30.


Wow I do not know where to even begin I have checked the text and still have no clue! Thanks to anyone that can help.

Quote:

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Originally Posted by socialight

Good morning,
the following data regarding purchases and sales of a commodity were taken from teh related perpetual inventory account:
6/1 balance............................25 units at $50
6/6 sale.................................20 units
6/8 purchase..........................20 units at $51
6/16 sale..................................10 units
6/20 purchase...........................20 units at $52
6/23 sale..................................25 units
6/30 purchase...........................15 units at $53
A) determine the cost of inventory balance at 6/30, using (1) the first in , first out method and (2) the last in, first out method. identify the quantity, unit price, and total cost of each lot in the inventory.
B) Present the journal entry to record a shortage (shrinkage) of $53 discovered by the physical count on 6/30.


Wow i do not know where to even begin i have checked the text and still have no clue! thanks to anyone that can help.

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FIFO
Date... Goods purchased... cost of goods sold... inventory balance
6/1... begining balance... 25@50=$1,250
6/6... 20@50= $1,000... 5@50= $250
6/8... 20@51= $1,020... 5@50= $250
... 20@51=$1,020
6/16... 5@50= 250... 15@51= 765
... 5@51= 255...
6/20... 20@52= 1,040... 15@51= 765
... 20@52= 1,040
6/23... 15@51= 765... 10@52= 520
... 10@52= 520...
6/30... 15@53= 795... 10@52= 520
... 15@53= 795
Cost of goods sold $2,790 ending merchandise inventory balance $1,315
LIFO
6/1... begining balance... 25@50= 1,250
6/6... 20@50= 1,000... 5@50= 250
6/8... 20@51= 1,020... 5@50=250
... 20@51= 1,020
6/16... 10@51=510... 5@50=250
... 10@51= 510
6/20... 20@52= 1,040... 5@50=250
... 10@51=510
... 20@52=1,040
6/23... 20@52= 1,040... 5@50=250
... 5@51= 255... 5@51=255
...
6/30... 15@53= 795... 5@50=250
... 5@51=255
... 15@53=795
Cost of goods sold $2,805 ending merchandise inventory balance $1,300
To record the shrinkage
Dr. Cost of goods sold... 53
Cr. Merchandise inventory... 53
hope this help you