Question

Required information The following information applies to the questions displayed below The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: Jan. 20 Purchased 460 units 8 $3,680 Apr. 21 Purchased 260 units e $ 10 2,600 July 25 Purchased 340 units $13 -,420 Sept. 19 Purchased 150 units e 15 2,250 During the year, The Shirt Shop sold 990 T-shirts for $24 each. b. Record the above transactions in general journal form and post to T-accounts using (1) FIFO. (2) LIFO, and (3) weighted average Use a separate set of journal entries and T-accounts for each method. Assume all transactions are cash transactions. Complete this question by entering your answers in the tabs below Required B T Acc FIFO Required B T Required B T Required B GJ LIFO Required B G) WA Acc WA Required B Required B G ACC LEO FIFO above transactions in general journal form. (if no entry is required for a transaction/event, select "No journal entry required" in the first account field) View transaction list Journal entry worksheet Record the entry for purchase of inventory for cash on January 20.

Answer 1

Journal entries under FIFO					T-Accounts under FIFO
Date	Account Titles	Debit	Credit		Purchases					Cash
Jan.20	Purchases	$3,680.00			To Cash	$3,680.00	By Inventory	$3,160.00		To Sales	$23,760.00	By Purchases	$3,680.00
	Cash		$3,680.00		To Cash	$2,600.00	By Cost of goods sold	$9,790.00				By Purchases	$2,600.00
					To Cash	$4,420.00						By Purchases	$4,420.00
Apr.21	Purchases	$2,600.00			To Cash	$2,250.00						By Purchases	$2,250.00
	Cash		$2,600.00			$12,950.00		$12,950.00				By balance c/f	$10,810.00
July.25	Purchases	$4,420.00			Cost of Goods sold					Sales
	Cash		$4,420.00		To Purchases	$9,790.00						By Cash	$23,760.00
Sept.19	Purchases	$2,250.00
	Cash		$2,250.00				By Income Summary	$9,760.00		To Income Summary	$23,760.00
						$9,790.00		$9,760.00			$23,760.00		$23,760.00
Dec.31	Cash	$23,760.00
	Sales		$23,760.00		Inventory					Calculation of cost of goods sold under FIFO
					To Purchases	$3,160.00				460 units * $8		$3,680.00
Dec.31	Inventory	$3,160.00								260 units * $10		$2,600.00
	Cost of goods sold	$9,790.00								270 units * $13		$3,510.00
	Purchases		$12,950.00				By balance c/f	$3,160.00		Cost of goods sold		$9,790.00
						$3,160.00		$3,160.00
Journal entries under LIFO					T-Accounts under LIFO
Date	Account Titles	Debit	Credit		Purchases					Cash
Jan.20	Purchases	$3,680.00			To Cash	$3,680.00	By Inventory	$1,760.00		To Sales	$23,760.00	By Purchases	$3,680.00
	Cash		$3,680.00		To Cash	$2,600.00	By Cost of goods sold	$11,190.00				By Purchases	$2,600.00
					To Cash	$4,420.00						By Purchases	$4,420.00
Apr.21	Purchases	$2,600.00			To Cash	$2,250.00						By Purchases	$2,250.00
	Cash		$2,600.00			$12,950.00		$12,950.00				By balance c/f	$10,810.00
July.25	Purchases	$4,420.00			Cost of Goods sold					Sales
	Cash		$4,420.00		To Purchases	$11,190.00						By Cash	$23,760.00
Sept.19	Purchases	$2,250.00
	Cash		$2,250.00				By Income Summary	$11,190.00		To Income Summary	$23,760.00
						$11,190.00		$11,190.00			$23,760.00		$23,760.00
Dec.31	Cash	$23,760.00
	Sales		$23,760.00		Inventory					Calculation of cost of goods sold under LIFO
					To Purchases	$1,760.00				150 units * $15		$2,250.00
Dec.31	Inventory	$1,760.00								340 units * $13		$4,420.00
	Cost of goods sold	$11,190.00								260 units * $10		$2,600.00
	Purchases		$12,950.00				By balance c/f	$1,760.00		240 units * $8		$1,920.00
						$1,760.00		$1,760.00		Cost of goods sold		$11,190.00
Journal entries under Weighted average method					T-Accounts under Weighted Average method
Date	Account Titles	Debit	Credit		Purchases					Cash
Jan.20	Purchases	$3,680.00			To Cash	$3,680.00	By Inventory	$2,355.00		To Sales	$23,760.00	By Purchases	$3,680.00
	Cash		$3,680.00		To Cash	$2,600.00	By Cost of goods sold	$10,595.00				By Purchases	$2,600.00
					To Cash	$4,420.00						By Purchases	$4,420.00
Apr.21	Purchases	$2,600.00			To Cash	$2,250.00						By Purchases	$2,250.00
	Cash		$2,600.00			$12,950.00		$12,950.00				By balance c/f	$10,810.00
July.25	Purchases	$4,420.00			Cost of Goods sold					Sales
	Cash		$4,420.00		To Purchases	$10,595.00						By Cash	$23,760.00
Sept.19	Purchases	$2,250.00
	Cash		$2,250.00				By Income Summary	$10,595.00		To Income Summary	$23,760.00
						$10,595.00		$10,595.00			$23,760.00		$23,760.00
Dec.31	Cash	$23,760.00
	Sales		$23,760.00		Inventory
					To Purchases	$2,355.00
Dec.31	Inventory	$2,355.00
	Cost of goods sold	$10,595.00
	Purchases		$12,950.00				By balance c/f	$2,355.00
						$2,355.00		$2,355.00
Weighted average unit cost = Total Purchase cost / Total units puchased = $12950 / 1210 units = $10.70 per unit
Cost of goods sold = 990 units * $10.70 per unit = $10595