Question

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?

Answer 1

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