Chippewas Company sells one product. Presented below is information for January for the 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.
(a) Assume Chippewas 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. (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)
Date Description/Account Debit Credit
Jan. 4
Jan. 11
Jan. 13
Jan. 20
Jan. 27
Jan. 31
(b) Compute gross profit using the periodic system.
$
(c) Assume Chippewas uses a perpetual system. Prepare all necessary journal entries.
Date Description/Account Debit Credit
Jan. 4
Inventory
Jan. 11
Jan. 13 Accounts receivable
Jan. 20
Jan. 27 Accounts receivable
(d) Compute gross profit using the perpetual system.