Managerial Accounting: E6-44 Consider the June transactions for Lawlor Lawn Service

Managerial Accounting

E6-44 Accounting for inventory using the perpetual system—FIFO
This exercise continues the Lawlor Lawn Service, Inc., situation from Exercise 5-42 in Chapter 5.
Consider the June transactions for Lawlor Lawn Service that were presented in Chapter 5. (Cost data has been removed from the sale transactions):
Jun 2 Completed lawn service and received cash of $800.
5 Purchased 110 plants on account for inventory, $304, plus freight in of $15.
15 Sold 60 plants on account, $600.
17 Consulted with a client on landscaping design for a fee of $250 on account.
20 Purchased 120 plants on account for inventory, $384.
21 Paid on account, $400.
25 Sold 110 plants for cash, $990.
30 Recorded the following adjusting entries:
Depreciation, $30
Physical count of plant inventory, 30 plants

1. Prepare perpetual inventory records for June for Lawlor using the FIFO method. (Note: You must figure cost on the 15th, 25th, and 30th.)
2. Journalize and post the June transactions using the perpetual inventory record created in Requirement 1. Key all items by date. Compute each account balance, and denote the balance as Bal.
3. Journalize and post the adjusting entries. Denote each adjusting amount as Adj. After posting all adjusting entries, prove the equality of debits and credits in the ledger.
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