Question

Required information [The following information applies to the questions displayed below.] Pam’s Creations had the following sales and purchase transactions during Year 2. Beginning inventory consisted of 270 items at $95 each. The company uses the FIFO cost flow assumption and keeps perpetual inventory records.

Date Transaction Description Mar. 5 Purchased 250 items @ $ 105

Apr. 10 Sold 145 items @ $ 205 June 19 Sold 265 items @ $ 205

Sept. 16 Purchased 200 items @ $ 110

Nov. 28 Sold 135 items @ $ 210

Required

a. Record the inventory transactions in general journal format

Answer 1

Journal entry

Date	account and explanation	debit	credit
Mar 5	Merchandise inventory (250*105)	26250
	Account payable		26250
	(To record purchase)
Apr 10	Account receivable (145*205)	29725
	Sales revenue		29725
	(To record sales)
	Cost of goods sold (145*95)	13775
	Merchandise inventory		13775
	(To record cost of goods sold)
June 19	Account receivable (265*205)	54325
	Sales revenue		54325
	(To record sales)
	Cost of goods sold (125*95+140*105)	26575
	Merchandise inventory		26575
	(To record cost of goods sold)
Sep 16	Merchandise inventory (200*110)	22000
	Account payable		22000
	(To record purchase)
Nov 28	Account receivable (135*210)	28350
	Sales revenue		28350
	(To record sales)
	Cost of goods sold (110*105+25*110)	14300
	Merchandise inventory		14300
	(To record cost of goods sold)