Question

LIFO Perpetual Inventory

The beginning inventory of merchandise 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	48		$600		$28,800
8		Purchase	96		720		69,120
11		Sale	64		2,000		128,000
30		Sale	40		2,000		80,000
May 8		Purchase	80		800		64,000
10		Sale	48		2,000		96,000
19		Sale	24		2,000		48,000
28		Purchase	80		880		70,400
June 5		Sale	48		2,100		100,800
16		Sale	64		2,100		134,400
21		Purchase	144		960		138,240
28		Sale	72		2,100		151,200

Required:

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

Dunne Co. Schedule of Cost of Merchandise Sold LIFO Method For the three-months ended June 30
	Purchases			Cost of Merchandise 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, the total cost of merchandise sold, and the gross profit from sales for the period.

Total sales	$
Total cost of merchandise sold
Gross profit	$

3. Determine the ending inventory cost on June 30.
$

Answer 1

Ans.

A/1	B	C	D	E	F	G	H	I	J	K
2	Dunne Co.
3	Schedule of Cost of Merchandise Sold
4	LIFO Method
5	For the Three Months Ended June 30
6		Purchases			Cost of Merchandise Sold			Inventory
7	Date	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
8	Apr. 3	-	-	-	-	-	-	48	600	28,800
9	Apr. 8	96	720	69,120	-		-	48	600	28,800
10		-	-	-	-		-	96	720	69,120
11	Apr. 11	-	-	-	64	720	46,080	48	600	28,800
12		-	-	-	-	-	-	32	720	23,040
13	Apr. 30	-	-	-	32	720	23,040	40	600	24,000
14		-	-	-	8	600	4,800	-	-	-
15	8-May	80	800	64,000	-	-	-	40	600	24,000
16		-			-	-	-	80	800	64,000
17	10-May	-	-	-	48	800	38,400	40	600	24,000
18		-	-	-				32	800	25,600
19	19-May	-	-	-	24	800	19,200	40	600	24,000
20		-	-	-				8	800	6,400
21	28-May	80	880	70,400	-	-	-	40	600	24,000
22		-	-	-	-	-	-	8	800	6,400
23		-	-	-	-	-	-	80	880	70,400
24	5-Jun	-	-	-	48	880	42,240	40	600	24,000
25		-	-	-	-	-	-	8	800	6,400
26		-	-	-	-	-	-	32	880	28,160
27	16-Jun	-	-	-	32	880	28,160	16	600	9,600
28		-	-	-	8	800	6,400	-	-	-
29		-	-	-	24	600	14,400	-	-	-
30	21-Jun	144	960	138,240	-	-	-	16	600	9,600
31		-			-	-	-	144	960	138,240
32	28-Jun	-	-	-	72	960	69,120	16	600	9,600
33		-	-	-	-	-	-	72	960	69,120
34	30-Jun	400		$341,760.00	360		$291,840.00	88		$ 78,720.00

2.

Sales Value

Date	Units	Price	Amount
11-Apr	64	$         2,000.00	$ 128,000.00
30-Apr	40	$         2,000.00	$    80,000.00
10-May	48	$         2,000.00	$    96,000.00
19-May	24	$         2,000.00	$    48,000.00
5-Jun	48	$         2,100.00	$ 100,800.00
16-Jun	64	$         2,100.00	$ 134,400.00
28-Jun	72	$         2,100.00	$ 151,200.00
	360		$ 738,400.00

Total sales	$     738,400.00
Total cost of goods sold	$    (291,840.00)
Gross profit from sales	$     446,560.00

3.

  The ending inventory cost on June 30 = $ 9,600 + $ 69,120 = $ 78,720