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.

 

Instructins

(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.