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# Using the FIFO cost formula, calculate the ending inventory for November and December

Question 1 Addy Corporation purchased merchandise on account from Betty Supplies for \$136,000, with terms of 2/10, n/30. During the discount period, Addy returned some merchandise and paid \$113,680 as payment in full. Addy uses a perpetual inventory system. Prepare the journal entries that Addy made to record the purchase and return of the merchandise, as well as the payment on account (Show all your work).a

Question 2 Study Corporation, which uses a perpetual inventory system, recorded the following inventory transactions during the last two months of 2022: Purchases Sales Units Unit Cost Units Selling Price/Unit Nov 1 Beginning inventory 210 \$120 13 Purchase 140 116 29 Sale 192 \$174 Dec 3 Purchase 100 112 16 Sale 104 168 Instructions

(a) Using the FIFO cost formula, calculate the cost of goods sold for the two months of November and December. Show calculations.

(b) Using the FIFO cost formula, calculate the ending inventory for November and December. Show calculation