GENERAL JOURNAL Page 1

Date Account Titles and Explanation P.R. Debit Credit

a.
FIFO
Date Purchases Sells
1-May 32,200
4-May 18,400
8-May 40,800
12-May 24,000
15-May 33,120
20-May 15,300
25-May 26,340
84,040
COGS

Moving average cost

Date Purchases Sells
1-May 32,200
4-May 18,400
8-May 40,800
12-May 24,818
15-May 33,120
20-May 15,726
25-May 26,209
85,153
COGS

b. FIFO produces higher ending inventory valuatio

Moving average cost produces lower ending inv
FIFO
Balance
32,200
13,800
54,600
30,600
63,720
48,420
22,080
22,080
Ending inventory

average cost
Balance Unit cost
32,200
13,800 4,600
54,600
29,782 4,964
62,902
47,176 5,242
20,967 5,242
20,967
Ending inventory

ng inventory valuation
uces lower ending inventory valuation
a. FIFO
Date Purchases Sells
31-Dec
2-Jan 2,100
6-Jan 2,850
9-Jan (190)
9-Jan 1,800
10-Jan (360)
10-Jan 1,030
23-Jan 2,600
30-Jan 3,740
7,430
COGS

Sales 15,850
COGS 7,430
Gross profit 8,420
b.
*With FIFO, COGS is less than COGS of moving a
the gross profit of FIFO is higher than the gross pro
IFO Moving average cost
Balance Date Purchases Sells Balance Unit cost
2,850 31-Dec 2,850
4,950 2-Jan 2,100 4,950
2,100 6-Jan 2,970 1,980 19.8
2,290 9-Jan (198) 2,178
4,090 9-Jan 1,800 3,978
3,730 10-Jan (360) 3,618
2,700 10-Jan 1,064 2,554 21.28
5,300 23-Jan 2,600 5,154
2,080 30-Jan 3,747 1,407 23.42
2,080 7,583 1,407
Ending inventory COGS Ending inventory

Sales 15,850
< COGS 7,583
> Gross profit 8,267

an COGS of moving average cost, so

gher than the gross profit of moving average cost.
a.
FIFO Average-cost Unit cost
Sales 10,900 10,900 26.3
Ending inventory 1,260 1,185
COGS 7,430 7,505
Gross profit 3,470 3,395
Gross profit rate 32% 31%

b. *With FIFO, COGS is less than COGS of Average-cost, so

the gross profit of FIFO is higher than the gross profit of Average-cost.
*FIFO and Average-cost have the same value of Sales, but
the gross profit of FIFO is higher than the gross profit of Average-cost, so
the gross profit rate of FIFO is higher than the gross profit of Average-cost.
Average-cost.

Average-cost, so
fit of Average-cost.
 Item Unit The lower of cost or net realizable value
Camaras
Minolta 8 156,000
Canon 6 150,000
Light meters
Vivitar 12 115,000
Kodak 14 115,000
Total ending inventory
 Value

1,248,000
900,000

1,380,000
1,610,000
5,138,000
 2019 2020
Beginning inventory 20,000 28,000
Cost of goods purchased 150,000 175,000
Cost of goods available for sale 170,000 203,000
Ending inventory 28,000 41,000
Cost of goods sold (correct cost) 142,000 162,000