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The company has also begun selling accounting software and uses the perpetual inventory system to account for software inventory.

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Requirement $1.$ Prepare perpetual inventory records for January for Donnelly using the FIFO inventory costing method. $($Note:

Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of th merchandise inventory purchased, sold, and on hand at the end of the period. $($Enter the oldest inventory layers first.$)$

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Jan. $2$ Completed a consulting engagement and received cash of $$7,400.$

$2$ Prepaid three months office rent, $$7,200.$

$7$ Purchased $75$ units software inventory on account, $$1,655,$ plus freight in$,$ $$70.$

$18$ Sold $30$ software units on account, $$2,700.$

$19$ Consulted with a client for a fee of $$1,200$ on account.

$20$ Paid employee salaries, $$1,800,$ which includes accrued salaries from December.

$21$ Paid on account, $$1,480.$

$22$ Purchased $200$ units software inventory on account, $$5,800.$

$24$ Paid utilities, $$260.$

$28$ Sold $90$ units software for cash, $$3,600.$

$31$ Recorded the following adjusting entries:

a$.$ Accrued salaries expense, $$600.$

b$.$ Depreciation on Equipment, $$40$; Depreciation on Furniture, $$20$

c$.$ Expiration of prepaid rent, $$2,400$

d$.$ Physical count of software inventory, $145$ units

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