Question

Daniel Company uses the perpetual inventory system to account for its merchandise. The beginning balance of the inventory and its transactions during January were as follows: January 1: Beginning Balance of 18 units at $13 each January 12: Purchased 15 units at $14 each January 19: Sold 24 units at a selling price of $28 each January 20: Purchased 24 units at $17 each January 27: Sold 27 units at a selling price of $32 each If the company uses the FIFO inventory method, what would be the Gross Profit for the month of January

Answer 1

Answer:

Gross profit for January = $786

Explanation:

Particulars            Units    Rate     Amount

Sales on 19th          24        $28        $672

Sales on 27th          27        $32        $864

Closing Balance       6         $17         $102

Total                                                    $1,638

Particulars                      Units     Rate     Amount

Opening                             18        $13        $234  

Purchases on Jan 12th      15        $14        $210  

Purchases on Jan 20th     24       $17        $408  

Gross Profit                                                 $786

Total                                                             $1,638