Esperado Furnishings are retailers who purchase and sell household furnishings, including table lamps. The business uses a perpetual inventory system and adjusts cost of goods sold for any shortage or excess inventory. The business began the last quarter of 2018 with merchandise inventory of 10 pairs of “Italia” table lamps at a total cost of $168,200. The following transactions, relating to the “Italia” brand were completed during the quarter: October 5 Purchased 15 pairs of lamps at a cost of $17,020 per pair. October 14 Sold 18 pairs of lamps to Muller Furnishings at $22,250 per pair October 22 Purchased 24 pairs at a cost of $18,175 per pair but the supplier gave a 4% quantity discount. November 10 Sold 15 pairs of lamps to Orion Household Ltd and 10 pairs to Brown’s Furnishings which yielded total sales revenue of $589,750. November 12 Owing to an increased demand for this product, 30 pairs of lamps were purchased on account at a cost of $17,612 per pair. In addition, Esperado paid $288 in cash on each pair of lamps to have the inventory shipped from the vendor’s warehouse to Esperado’s showroom. November 27 Sold 23 pairs of lamps to Middletown Company at a price of $25,080 per pair. November 30 An actual count of inventory was carried out which revealed that there were 15 pairs of the “Italia” brand in the warehouse. December 2 In preparation for the festive season, Esperado purchased 25 pairs of lamps at a total cost of $474,500. December 15 5 pairs of the lamps purchased on December 2 were returned to the supplier, as they were not of the brand ordered. December 30 Sold 22 pairs of lamps to two customers (Omega Traders & Middleton Furnishings) at a selling price of $26,550 per pair. i) Prepare a perpetual inventory record for Esperado Furnishings, using the first in, first out (FIFO) method to determine the value of ending inventory at December 31, 2018, and the total amount to be assigned to cost of goods sold for the period.
Esperado Furnishings are retailers who purchase and sell household furnishings, including table lamps. The business uses a perpetual inventory system and adjusts cost of goods sold for any shortage or excess inventory. The business began the last quarter of 2018 with merchandise inventory of 10 pairs of “Italia” table lamps at a total cost of $168,200. The following transactions, relating to the “Italia” brand were completed during the quarter:
October 5 Purchased 15 pairs of lamps at a cost of $17,020 per pair.
October 14 Sold 18 pairs of lamps to Muller Furnishings at $22,250 per pair
October 22 Purchased 24 pairs at a cost of $18,175 per pair but the supplier gave a 4% quantity discount. November 10 Sold 15 pairs of lamps to Orion Household Ltd and 10 pairs to Brown’s Furnishings which yielded total sales revenue of $589,750. November 12 Owing to an increased demand for this product, 30 pairs of lamps were purchased on account at a cost of $17,612 per pair. In addition, Esperado paid $288 in cash on each pair of lamps to have the inventory shipped from the vendor’s warehouse to Esperado’s showroom. November 27 Sold 23 pairs of lamps to Middletown Company at a price of $25,080 per pair.
November 30 An actual count of inventory was carried out which revealed that there were 15 pairs of the “Italia” brand in the warehouse.
December 2 In preparation for the festive season, Esperado purchased 25 pairs of lamps at a total cost of $474,500. December 15 5 pairs of the lamps purchased on December 2 were returned to the supplier, as they were not of the brand ordered.
December 30 Sold 22 pairs of lamps to two customers (Omega Traders & Middleton Furnishings) at a selling price of $26,550 per pair.
i) Prepare a perpetual inventory record for Esperado Furnishings, using the first in, first out (FIFO) method to determine the value of ending inventory at December 31, 2018, and the total amount to be assigned to cost of goods sold for the period.
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