Answered: The beginning inventory at Dunne Co.…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter1: Introduction To Managerial Accounting

Section: Chapter Questions

Problem 5BE: Cost of goods sold, cost of goods manufactured Glenville Company has the following information for...

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FIFO Perpetual Inventory

The beginning inventory at Dunne Co. and data on purchases and sales for a three-month period ending June 30 are as follows:

Date	Transaction	# of Units	Per Unit	Total
Apr. 3	Inventory	84	$225	$18,900
8	Purchase	168	270	45,360
11	Sale	112	750	84,000
30	Sale	70	750	52,500
May 8	Purchase	140	300	42,000
10	Sale	84	750	63,000
19	Sale	42	750	31,500
28	Purchase	140	330	46,200
June 5	Sale	84	790	66,360
16	Sale	112	790	88,480
21	Purchase	252	360	90,720
28	Sale	126	790	99,540

Required:

1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 3, using the first-in, first-out method. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Goods Sold Unit Cost column and in the Inventory Unit Cost column.

Dunne Co.
Schedule of Cost of Goods Sold
FIFO Method
For the Three Months Ended June 30
Purchases
Cost of Goods Sold
Inventory
Date
Quantity
Unit Cost
Total Cost
Quantity
Unit Cost
Total Cost
Quantity
Unit Cost
Total Cost
Apr. 3
Apr. 8
Apr. 11
Apr. 30
May 8
May 10
May 19
May 28
June 5
June 16
June 21

June 28
June 30
Balances
2. Determine the total sales and the total cost of goods sold for the period. Journalize the entries in the sales and cost of goods sold accounts. Assume that all sales were on account.
Record
sale
Record
cost
3. Determine the gross profit from sales for the period.
4. Determine the ending inventory cost as of June 30.
5. Based upon the preceding data, would you expect the ending inventory using the last-in, first-out method to be higher or lower?

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