# The beginning inventory at Midnight Supplies and data on purchases and sales for a three month period ending March 31 are as follows:DateTransactionNumber of UnitsPer UnitTotalJan.1Inventory2,500\$70.00\$175,000 10Purchase8,00078.00624,000 28Sale3,800140.00532,000 30Sale1,250140.00175,000Feb.5Sale500140.0070,000 10Purchase17,00080.001,360,000 16Sale9,100145.001,319,500 28Sale8,700145.001,261,500Mar.5Purchase14,30081.601,166,880 14Sale9,800145.001,421,000 25Purchase3,00082.00246,000 30Sale7,900145.001,145,500  Instructions1.Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in Exhibit 3, using the first-in, first-out method.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 and date your journal entry March 31. Refer to the Chart of Accounts for exact wording of account titles.3.Determine the gross profit from sales for the period.4.Determine the ending inventory cost as of March 31.5.Based upon the preceding data, would you expect the ending inventory using the last-in, first-out method to be higher or lower?

Question
The beginning inventory at Midnight Supplies and data on purchases and sales for a three month period ending March 31 are as follows:
 Date Transaction Number of Units Per Unit Total Jan. 1 Inventory 2,500 \$70.00 \$175,000 10 Purchase 8,000 78.00 624,000 28 Sale 3,800 140.00 532,000 30 Sale 1,250 140.00 175,000 Feb. 5 Sale 500 140.00 70,000 10 Purchase 17,000 80.00 1,360,000 16 Sale 9,100 145.00 1,319,500 28 Sale 8,700 145.00 1,261,500 Mar. 5 Purchase 14,300 81.60 1,166,880 14 Sale 9,800 145.00 1,421,000 25 Purchase 3,000 82.00 246,000 30 Sale 7,900 145.00 1,145,500

 Instructions 1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in Exhibit 3, using the first-in, first-out method. 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 and date your journal entry March 31. Refer to the Chart of Accounts for exact wording of account titles. 3. Determine the gross profit from sales for the period. 4. Determine the ending inventory cost as of March 31. 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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Step 1

1.

Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record, using the first-in, first-out method.

Step 2

2.

Determine the total sales and the total cost of goods sold for the period and record the journal entries for sales and cost of merchandise sold accounts.

Step 3

Calculate the gross profit for t...

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