LIFO perpetual inventory The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are shown in Problem 7-1B. Instructions 1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4, using the last-in. first-out method. 2. Determine the total sales, the total cost of merchandise sold, and the gross profit from sales for the period. 3. Determine the ending inventory cost on June 30.

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 7, Problem 7.2BPR
Textbook Problem

LIFO perpetual inventoryThe beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are shown in Problem 7-1B.Instructions 1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4, using the last-in. first-out method. 2. Determine the total sales, the total cost of merchandise sold, and the gross profit from sales for the period. 3. Determine the ending inventory cost on June 30.

Expert Solution

(1)

To determine

Perpetual Inventory System:

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases, and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Last-in-Last-Out:

In Last-in-First-Out method, the costs of last purchased items are considered as the cost of goods sold, for the items which are sold first. The value of the closing stock consists of the initial purchased items.

To record: the inventory, purchases and cost of merchandise sold in perpetual inventory system.

Explanation of Solution

Calculate the cost of merchandise sold and ending inventory.

Expert Solution

(2)

To determine

To calculate: total sales and cost of merchandise sold accounts and gross profit for the three months period.

Expert Solution

(3)

To determine
ending inventory cost for the period ending June 30.

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