Burlington Wholesale Inc. had the following inventory transactions for one month. The company uses a perpetual system and FIFO. All purchases and sales are on account.

26 0

Get full Expert solution in seconds

$1.97 ONLY

Unlock Answer
# ofunit cost or
itemssale price
January 1Opening
balance
40$20
January 5Purchase20$22
January 7Purchase
of January 5
items returned
-5
January 10Sale50$40
January 12Purchase25$24
January 17Sale20$50
January 24Purchase35$25

Question 29 options:

What is the gross profit percentage on the January 10 sale?

Question 30 options:

What is the amount of gross profit on the January 10 sale?

Question 31 options:

What is the value of the inventory after the January 12 transaction?

Question 32 options:

What amount of cost of goods sold will be recorded on January 17?

Question 33 options:

What is the value of the inventory after the January 17 transaction?

Question 34 options:

What is the gross profit percentage on the January 17 sale?

Question 35 options:

What is the amount of gross profit on the January 17 sale?

Question 36 options:

What is the value of the inventory after the January 24 transaction?

Question 37 options:

What is the total revenue for the month?

Question 38 options:

What is the total gross profit for the month? (2 marks)

Question 39 options:

What is the amount of the adjustment that must be made to inventory at the end of the month if the selling price drops to $20?

Start your answer with a + sign if an increase, a – sign if a decrease, or enter 0 if no adjustment is needed. (2 marks)

Question 40 options:

What is the amount of the adjustment that must be made to inventory at the end of the month if the selling price drops to $30?

Start your answer with a + sign if an increase, a – sign if a decrease, or enter 0 if no adjustment is needed. (2 marks)

EXPERT ANSWER

FIFO – Perpetual Inventory System
DatePurchasesCost of Goods SoldEnding Inventory
Units (a)Rate (b)Total (a*b)Units (a)Rate (b)Total (a*b)Units (a)Rate (b)Total (a*b)
January 1.40$20$800
January 5.20$22$44040$20$800
20$22$440
January 7.-5$22($110)40$20$800
15$22$330
January 10.40$20$800
10$22$2205$22$110
January 12.25$24$6005$22$110
25$24$600
January 17.5$22$110
15$24$36010$24$240
January 24.35$25$87510$24$240
35$25$875
Total45$1,115
Question 29:
Sales on January 10 (50 units * $40 each)$2,000
Less: Cost of goods sold on January 10 ($800 + $220)($1,020)
Gross Profit$980
Gross profit percentage ($980/$2,000*100)49%
Question 30:
Gross profit on January 10th$980(as calculated above)
Question 31:
Value of inventory after January 12th ($110 + $600)$710
Question 32:
Cost of goods sold on January 17th ($110 + $360)$470
Question 33:
Value of inventory after January 17th$240
Question 34:
Sales on January 17 (20 units * $50 each)$1,000
Less: Cost of goods sold on January 17 ($110 + $360)($470)
Gross Profit$530
Gross profit percentage ($530/$1,000*100)53%
Question 35:
Gross profit on January 17th$530(as calculated above)
Question 36:
Value of inventory after January 24th ($240 + $875)$1,115
Question 37:
Total revenue for the month –
Sale on January 10$2,000(as calculated above)
Sale on January 17$1,000(as calculated above)
Total revenue for the month$3,000
Question 38:
Total gross profit for the month –
Gross Profit on January 10$980(as calculated above)
Gross Profit on January 17$530(as calculated above)
Total gross profit for the month$1,510