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A company that uses a perpetual inventory system made the following cash purchases and sales. There...

A company that uses a perpetual inventory system made the following cash purchases and sales. There was no beginning inventory.

January 1:

Purchased 100 units at SAR10 per unit

February 5:

Purchased 60 units at SAR 12 per unit

March 16:

Sold 40 Units for SAR 16 per unit

Prepare general journal entries to record the March 16 sale using the

  • FIFO inventory valuation method.
  • LIFO inventory valuation method.
Business   Accounting   
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Answer #1
FIFO inventory Valuation Method
Date General Journal Debit Credit
Mar-16 Cash (40 units * SAR 16) SAR 640
Sales SAR 640
Mar-16 Cost Of Goods Sold (40 Units * SAR 10) SAR 400
Inventory SAR 400
LIFO inventory Valuation Method
Date General Journal Debit Credit
Mar-16 Cash (40 units * SAR 16) SAR 640
Sales SAR 640
Mar-16 Cost Of Goods Sold (40 Units * SAR 12) SAR 480
Inventory SAR 480
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