Mike tells you that he took an inventory of computers on hand at December 31 and
ID: 2445967 • Letter: M
Question
Mike tells you that he took an inventory of computers on hand at December 31 and there were 18 computers in the warehouse. When you ask him what costing method he is using to account for inventory and cost of goods sold, he looks at you blankly and responds, “What do you mean?” After explaining the different methods for accounting for inventory costs, the two of you decide to use the FIFO method.
MK Computers, Inc.
Schedule of Inventory Purchases
For the quarter ended December 31, 2014
No. of
Purchase Price
Total
Date
computers
per Computer
10/3/2014
18
$1,300
23,400
10/16/2014
21
1,350
28,350
10/29/2014
16
1,575
25,200
11/5/2014
17
1,600
27,200
11/15/2014
14
1,625
22,750
11/23/2014
17
1,685
28,645
12/12/2014
16
1,725
27,600
12/21/2014
13
1,800
234,000
prepare Journal Entry?
MK Computers, Inc.
Schedule of Inventory Purchases
For the quarter ended December 31, 2014
No. of
Purchase Price
Total
Date
computers
per Computer
10/3/2014
18
$1,300
23,400
10/16/2014
21
1,350
28,350
10/29/2014
16
1,575
25,200
11/5/2014
17
1,600
27,200
11/15/2014
14
1,625
22,750
11/23/2014
17
1,685
28,645
12/12/2014
16
1,725
27,600
12/21/2014
13
1,800
234,000
Explanation / Answer
Mike tells you that he took an inventory of computers on hand at December 31 and