E8-9 (Periodic versus Perpetual Entries) Fong Sai-Yuk Company sells one product. Presented below is information for January for Fong Sai-Yuk Company.
| Jan 1 |
Inventory |
100 |
units at |
$5.00 |
each |
| Jan 4 |
Sale |
80 |
units at |
$8.00 |
each |
| Jan 11 |
Purchase |
150 |
units at |
$6.00 |
each |
| Jan 13 |
Sale |
120 |
units at |
$8.75 |
each |
| Jan 20 |
Purchase |
160 |
units at |
$7.00 |
each |
| Jan 27 |
Sale |
100 |
units at |
$9.00 |
each |
Fong Sai-Yuk uses the FIFO cost flow assumption. All purchases and sales are on account.
Instructions
(a) Assume Fong Sai-Yuk 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.
(b) Compute the gross profit using the periodic system.
(c) Assume Fong Sai-Yuk uses a perpetual system. Prepare all necessary journal entries.
(d) Compute the gross profit using the perpetual system.