The following information for Urbanski Corporation relates to the three months ending June 30, 2018: UnitsPrice per unitBeginning inventory11,000$10 Purchases75,000$16 Sales80,000$25 Ending inventory6,000 ??Urbanski uses the LIFO method to account for inventory, and expects at least 15,000 units to be on hand in the ending inventory at year-end. Purchases made in the last six months are expected to cost an average of $18 per unit.?Prepare the journal entries to reflect the sales and cost of goods sold, assuming Urbanski expects to maintain 11,000 units in inventory at year-end.
What will be an ideal response?
Journal Entries to Record Sales and Cost of Goods Sold
| Cash or accounts receivable | 2,000,000 | |
| Sales revenue | 2,000,000 | |
| Cost of goods sold | 1,290,000 | |
| Inventory | 1,250,000 | |
| Excess of replacement cost over historical cost of LIFO liquidation | 40,000 | |
? | ||
| ? | ||
| Excess of replacement cost over historical cost for beginning inventory liquidated: | ||
| ? | ||
| [($18 - $10) × 5,000 units] | ||
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