Question

On December 1, 2017, Shamrock, Inc. had the account balances shown below.

		Debits				Credits
Cash		$5,230		Accumulated Depreciation—Equipment		$1,490
Accounts Receivable		3,590		Accounts Payable		3,260
Inventory (2,900 x $0.60)		1,740		Common Stock		9,500
Equipment		20,300		Retained Earnings		16,610
		$30,860				$30,860

The following transactions occurred during December.

Dec. 3		Purchased 3,900 units of inventory on account at a cost of $0.68 per unit.
5		Sold 4,300 units of inventory on account for $0.80 per unit. (It sold 2,900 of the $0.60 units and 1,400 of the $0.68.)
7		Granted the December 5 customer $240 credit for 300 units of inventory returned costing $210. These units were returned to inventory.
17		Purchased 2,200 units of inventory for cash at $0.90 each.
22		Sold 2,100 units of inventory on account for $0.93 per unit. (It sold 2,100 of the $0.68 units.)

Adjustment data:

1.		Accrued salaries and wages payable $420.
2.		Depreciation on equipment $210 per month.

3.

Income tax expense was $220, to be paid next year. Question a) Compute ending inventory and cost of goods sold under FIFO, assuming Shamrock, Inc. uses the periodic inventory system.

Answer 1

hi, please find below the answer let me know if you need any clarification -

	Given that-
			Qty	Rate	Value
	Opening inventory		2900	0.6	1740
3-Dec	Purchases		3900	0.68	2652
17-Dec	Purchases		2200	0.9	1980
	Total		9000		6372
	Computation of cost of goods sold
5-Dec	Sales net of return		2900	0.6	1740
	4300-300=4000		1100	0.68	748
			4000		2488
22-Dec	Sales net of return		2100	0.68	1428
	Total cost of goods sold		6100		3916
	Computation of closing inventory
	Closing inventory = 9000-6100=		2900
	Value of closing inventory = 700*0.68+2200*.9				2456