Question

Gaya Joe operates as a retailer of fine and gourmet coffees of the world. One of his favorites allers is a blend purchased from a locally operated company called "The Roasterle Java Joe following purchases and sales of flavor sealed coffee Note that lavalne sells coffee by the pound points). Date June 5 Beginning Units sold at Retail June 12 June 19 June 21 June 26 June 29 Activities Inventory 125 Purchase 200 Purchase 175 Sales Purchase 300 Pounds Pounds Pounds Units Acquired at Cost @ $ 5.00 = $ 625 @ $ 6.00 = $ 1.200 @ $ 7.00 = $ 1.225 Pounds 300 @ $ 8.00 = Pounds Sales @ $ 10 each W $ = $ 2,400 200 Pounds @$ 11 each Totals 800 Pounds $ 5,450 500 Pounds a) Compute the cost of ending inventory on June 30th and cost of goods sold using the FIFO method. Cost of Goods Sold June 21st Sale 1900 = 1200 2006 1001 300 -100 Cost of Goods Sold June 29th Sale Cost of Ending Inventory on June 30th b) Compute the cost of ending inventory on June 30th and cost of goods sold using the LIFO method. 175 @ 7 = 1295 Cost of Goods Sold June 21st Sale 625 1150 Cost of Goods Sold June 29th Sale_ Cost of Ending Inventory on June 30th c) Prepare the journal entry(s) related to the sale to customers of 200 pounds of coffee at $11 each on June 29th using the information determined from LIFO above. Assume customers paid in cash. Page 5 of 9

Answer 1

Answer A
21st June	Cost of Goods sold June 21st Sales
	125 pounds * $5	625
	175 pounds * $6	1050
	Cost of Goods sold 300 Pounds	1675
29th June	Cost of Goods sold June 29th Sales
	25 pounds * $6	150
	175 pounds * $7	1225
	Cost of Goods sold 200 Pounds	1375
30th June	Cost of ending inventory June 30th Sales
	300 pounds * $8	2400
	Cost of ending inventory June 30th Sales	2400

Answer B
21st June	Cost of Goods sold June 21st Sales
	175 pounds * $7	1225
	125 pounds * $6	750
	Cost of Goods sold 300 Pounds	1975
29th June	Cost of Goods sold June 29th Sales
	200 pounds * $8	1600
	Cost of Goods sold 200 Pounds	1600
30th June	Cost of ending inventory June 30th Sales
	100 pounds * $8	800
	75 pounds * $7	525
	125 pounds * $5	625
	Cost of ending inventory June 30th Sales	1950

Answer C
		Debit	Credit
29th June	Cash (200*11)	2200
	Sales		2200
	( cash sales)
	cost of good sold	1600
	inventory		1600
	( entry for cost of goods sold)