Question

LIFO Perpetual Inventory

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

Date		Transaction	Number of Units		Per Unit		Total
Apr. 3		Inventory	42		$525		$22,050
8		Purchase	84		630		52,920
11		Sale	56		1,750		98,000
30		Sale	35		1,750		61,250
May 8		Purchase	70		700		49,000
10		Sale	42		1,750		73,500
19		Sale	21		1,750		36,750
28		Purchase	70		770		53,900
June 5		Sale	42		1,840		77,280
16		Sale	56		1,840		103,040
21		Purchase	126		840		105,840
28		Sale	63		1,840		115,920

Required:

1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in Exhibit 3, 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 Goods Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column.

Dunne Co. Schedule of Cost of Goods Sold LIFO 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, the total cost of goods sold, and the gross profit from sales for the period.

Total sales	$
Total cost of goods sold	$
Gross profit from sales	$

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

Answer 1

Ans.1	DUNNE CO.
	Schdule of Cost Of Merchandise Sold
	LIFO Method
	For the Three Months Ended June 30
		Purchase			Cost of Goods Sold			Balance
	Date	Quantity	Unit cost	Total cost	Quantity	Units sold	COGS	Quantity	Unit cost	Total cost
	3-Apr	42	525	22050				42	525	22050
	8-Apr	84	630	52920				42	525	22050
								84	630	52920
	11-Apr				56	630	35280	42	525	22050
								28	630	17640
	30-Apr				28	630	17640
					7	525	3675	35	525	18375
	8-May	70	700	49000				35	525	18375
								70	700	49000
	10-May				42	700	29400	35	525	18375
								28	700	19600
	19-May				21	700	14700	35	525	18375
								7	700	4900
	28-May	70	770	53900				35	525	18375
								7	700	4900
								70	770	53900
	5-Jun				42	770	32340	35	525	18375
								7	700	4900
								28	770	21560
	16-Jun				28	770	21560
					7	700	4900
					21	525	11025	14	525	7350
	21-Jun	126	840	105840				14	525	7350
								126	840	105840
	28-Jun				63	840	52920	14	525	7350
								63	840	52920
	Balance30 june				COGS		223440	End. Inv.		60270
	In Perpetual inventory method of LIFO, the units that purchase last are sold first one.
Ans.2	Total sales		565740
	Less: Cost of goods sold		223440
	Gross profit		342300
	*Calculation of total sales:
	Date	Units	Rate	Total sales
	11-Apr	56	1750	98000
	30-Apr	35	1750	61250
	10-May	42	1750	73500
	19-May	21	1750	36750
	5-Jun	42	1840	77280
	16-Jun	56	1840	103040
	28-Jun	63	1840	115920
	Total			565740
Ans.3	Cost of ending inventory    =    $60270