The Maya Company’s beginning inventory of 2015 are below, as well sales and purchases.
Beginning inventory : 600 units $5 each
S1 Sales : 400 units at $12 each
P1 Purchases : 1,600 units costing $9600
S2 Sales : 1000 units at 12,50
P2 Purchases : 1000 units costing $6500
S3 Sales : 600 units at $13.50
Cash payment on account totaled $ 14,000 during the year.
The company uses the FIFO inventory method.
Cash collection from customers was $ 20,000. Operating expenses totaled $ 11,200 of which Maya paid $ 10,500 cash. Maya credited Accrued Liabilities for the remainder. At December 31, Maya accrued income tax expense at the rate of 15 % of income before tax.
1. Assume the Breeze trading company uses periodic inventory system compute the cost of goods sold (COGS), ending inventory and gross profit under : (A) FIFO (B) LIFO
Using a T-account and multiply the number of units by unit cost.
2. Make summary journal entries to record Maya’s transactions for the year, assuming the company uses a FIFO periodic inventory system.
3. Prepare Maya’s income statement for 2015.
Please provide your way of calculation.