Reference no: EM132705988

A flood recently destroyed many of the financial records of Shorts Manufacturing Company. Management has hired you to recreate a s much financial information as possible for the month of July. You are able to find out that the company uses an average cost inventory valuation method. You also learn that company makes a physical count at the end of each month in order to determine monthly ending inventory values.

By examining various documents, you are able to gather the following information:

Ending inventory at July 31 60,000 units
Total cost of units available for sale in July €145,210
Cost of beginning inventory, July 1 €0.40 per unit
Gross profit on sales for July €93,590
July purchases:

Instructions

Question 1: You are asked to provide the following information.

a) Number of units on hand, July 1.
b) Units sold during July.
c) Unit cost of inventory at July 31.
d) Value of inventory at July 31.
e) Cost of goods sold for July.
f) Sales revenue for July.
g) Necessary journal entries to record

1. sales,
2. purchases,
3. end-of-month entry, to record cost of goods sold (assume Shorts Manufacturing Company uses a periodic system).