The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period ending March 31, are as follows: Number of Units Per Unit Date Transaction Total $ 75.00 $ 562,500 7,500 Jan. 1 Inventory 85.00 10 Purchase 22,500 1,912,500 11,250 Sale 150.00 1,687,500 28 150.00 Sale 3,750 562,500 30 Feb. 5 Sale 1,500 150.00 225,000 87.50 Purchase 54,000 4,725,000 10 Sale 160.00 27,000 4,320,000 16 Sale 25,500 160.00 4,080,000 28 89.50 Purchase 45,000 4,027,500 Mar. 5 14 Sale 30,000 160.00 4,800,000 Purchase 90.00 25 7,500 675,000 Sale 26,250 160.00 4,200,000 30 Instructions 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. 2. Determine the total sales and the total cost of merchandise sold for the period. Jour- nalize the entries in the sales and cost of merchandise sold accounts. Assume that all sales were on account. 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 inventory using the last-in, first-out method to be higher or lower?
The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period ending March 31, are as follows: Number of Units Per Unit Date Transaction Total $ 75.00 $ 562,500 7,500 Jan. 1 Inventory 85.00 10 Purchase 22,500 1,912,500 11,250 Sale 150.00 1,687,500 28 150.00 Sale 3,750 562,500 30 Feb. 5 Sale 1,500 150.00 225,000 87.50 Purchase 54,000 4,725,000 10 Sale 160.00 27,000 4,320,000 16 Sale 25,500 160.00 4,080,000 28 89.50 Purchase 45,000 4,027,500 Mar. 5 14 Sale 30,000 160.00 4,800,000 Purchase 90.00 25 7,500 675,000 Sale 26,250 160.00 4,200,000 30 Instructions 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. 2. Determine the total sales and the total cost of merchandise sold for the period. Jour- nalize the entries in the sales and cost of merchandise sold accounts. Assume that all sales were on account. 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 inventory using the last-in, first-out method to be higher or lower?
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter6: Inventories
Section: Chapter Questions
Problem 2PB: LIFO perpetual inventory The beginning inventory for Dunne Co. and data on purchases and sales for a...
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Question
Transcribed Image Text:The beginning inventory at Midnight Supplies and data on purchases and sales for a
three-month period ending March 31, are as follows:
Number
of Units
Per
Unit
Date
Transaction
Total
$ 75.00
$ 562,500
7,500
Jan. 1
Inventory
85.00
10 Purchase
22,500
1,912,500
11,250
Sale
150.00
1,687,500
28
150.00
Sale
3,750
562,500
30
Feb. 5
Sale
1,500
150.00
225,000
87.50
Purchase
54,000
4,725,000
10
Sale
160.00
27,000
4,320,000
16
Sale
25,500
160.00
4,080,000
28
89.50
Purchase
45,000
4,027,500
Mar. 5
14 Sale
30,000
160.00
4,800,000
Purchase
90.00
25
7,500
675,000
Sale
26,250
160.00
4,200,000
30
Instructions
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.
2. Determine the total sales and the total cost of merchandise sold for the period. Jour-
nalize the entries in the sales and cost of merchandise sold accounts. Assume that all
sales were on account.
3. Determine the gross profit from sales for the period.
Transcribed Image Text:4. Determine the ending inventory cost as of March 31.
5. Based upon the preceding data, would you expect the inventory using the last-in,
first-out method to be higher or lower?
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