Question

In: Accounting

FIFO Perpetual Inventory The beginning inventory at Dunne Co. and data on purchases and sales for...

FIFO Perpetual Inventory

The beginning inventory at Dunne Co. and data on purchases and sales for a three-month period ending June 30 are as follows:

Date Transaction Number
of Units
Per Unit Total
Apr. 3 Inventory 72 $450 $32,400
8 Purchase 144 540 77,760
11 Sale 96 1,500 144,000
30 Sale 60 1,500 90,000
May 8 Purchase 120 600 72,000
10 Sale 72 1,500 108,000
19 Sale 36 1,500 54,000
28 Purchase 120 660 79,200
June 5 Sale 72 1,575 113,400
16 Sale 96 1,575 151,200
21 Purchase 216 720 155,520
28 Sale 108 1,575 170,100

Required:

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. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Goods Sold Unit Cost column and in the Inventory Unit Cost column.

Dunne Co.
Schedule of Cost of Goods Sold
FIFO Method
For the Three Months Ended June 30
Purchases Cost of Goods Sold Inventory
Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost
Apr. 3 $ $
Apr. 8 $ $
Apr. 11 $ $
Apr. 30
May 8
May 10
May 19
May 28
June 5
June 16
June 21
June 28
June 30 Balances $ $

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. If an amount box does not require an entry, leave it blank.

Record sale
Record cost

3. Determine the gross profit from sales for the period.
$

4. Determine the ending inventory cost as of June 30.
$

5. Based upon the preceding data, would you expect the ending inventory using the last-in, first-out method to be higher or lower?

Solutions

Expert Solution

2
date General Journal Debit $ Credit $
Accounts Receivable 830700
sales (144000+90000+108000+54000+113,400+151,200+170,100) 830700
(Recorded sales)
COGS 321840
merchandise inventory 321840
(Recorded cost)
3 GP= SALES - COGS
     = 830700-321840
     = $ 508860
4 Ending inventory = 95040

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