The beginning inventory at Midnight Supplies and data onpurchases and sales for a three-month...

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Accounting

The beginning inventory at Midnight Supplies and data onpurchases and sales for a three-month period ending March 31, areas follows:
Date
Transaction
Number of Units
Per Unit
Total
Jan. 1 Inventory 2,500 $52.00 $130,000
10 Purchase 7,800 60.00 468,000
28 Sale 3,750 104.00 390,000
30 Sale 1,200 104.00 124,800
Feb. 5 Sale 500 104.00 52,000
10 Purchase 17,500 62.00 1,085,000
16 Sale 8,600 109.00 937,400
28 Sale 8,900 109.00 970,100
Mar. 5 Purchase 14,200 63.60 903,120
14 Sale 10,200 109.00 1,111,800
25 Purchase 3,400 64.00 217,600
30 Sale 7,900 109.00 861,100
Instructions
1. Record the inventory, purchases, and cost of merchandise solddata in a perpetual inventory record similar to the one illustratedin
Exhibit 3
, using the first-in, first-out method.
2. Determine the total sales and the total cost of merchandisesold for the period. Journalize the entries in the sales and costof merchandise sold accounts. Assume that all sales were on accountand date your journal entry March 31. Refer to the Chart ofAccounts 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 inventoryusing the last-in, first-out method to be higher or lower?

Date	Transaction	Number of Units	Per Unit	Total
Jan.	1	Inventory	2,500	$52.00	$130,000
	10	Purchase	7,800	60.00	468,000
	28	Sale	3,750	104.00	390,000
	30	Sale	1,200	104.00	124,800
Feb.	5	Sale	500	104.00	52,000
	10	Purchase	17,500	62.00	1,085,000
	16	Sale	8,600	109.00	937,400
	28	Sale	8,900	109.00	970,100
Mar.	5	Purchase	14,200	63.60	903,120
	14	Sale	10,200	109.00	1,111,800
	25	Purchase	3,400	64.00	217,600
	30	Sale	7,900	109.00	861,100

	Instructions
1.	Record the inventory, purchases, and cost of merchandise solddata in a perpetual inventory record similar to the one illustratedin Exhibit 3 , using the first-in, first-out method.
2.	Determine the total sales and the total cost of merchandisesold for the period. Journalize the entries in the sales and costof merchandise sold accounts. Assume that all sales were on accountand date your journal entry March 31. Refer to the Chart ofAccounts 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 inventoryusing the last-in, first-out method to be higher or lower?

Answer & Explanation Solved by verified expert

3.7 Ratings (568 Votes)

1 FIFO Purchases Cost of Goods Sold Inventory on hand Date Activity Units Unit Price Amount Units Unit Price Amount Units Unit Price Amount Jan 1 Beginning Inventory 2500 5200 130000 Jan 10 Purchase 7800 6000 468000 2500 5200 130000 7800 6000 468000 See Answer

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In: AccountingThe beginning inventory at Midnight Supplies and data onpurchases and sales for a three-month period...The beginning inventory at Midnight Supplies and data onpurchases and sales for a three-month period ending March 31, areas follows:DateTransactionNumber of UnitsPer UnitTotalJan.1Inventory2,500$52.00$130,00010Purchase7,80060.00468,00028Sale3,750104.00390,00030Sale1,200104.00124,800Feb.5Sale500104.0052,00010Purchase17,50062.001,085,00016Sale8,600109.00937,40028Sale8,900109.00970,100Mar.5Purchase14,20063.60903,12014Sale10,200109.001,111,80025Purchase3,40064.00217,60030Sale7,900109.00861,100Instructions1.Record the inventory, purchases, and cost of merchandise solddata in a perpetual inventory record similar to the one illustratedinExhibit 3, using the first-in, first-out method.2.Determine the total sales and the total cost of merchandisesold for the period. Journalize the entries in the sales and costof merchandise sold accounts. Assume that all sales were on accountand date your journal entry March 31. Refer to the Chart ofAccounts 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 inventoryusing the last-in, first-out method to be higher or lower?