Textbook Problem

FIFO perpetual inventory

The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period ending March 31 are as follows:

Instructions

1. 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. 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.
3. 3. Determine the gross profit from sales for the period.
4. 4. Determine the ending inventory cost as of March 31.
5. 5. Based upon the preceding data, would you expect the ending inventory using the last-in, first-out method to be higher or lower?