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	90		$450		$40,500
8		Purchase	180		540		97,200
11		Sale	120		1,500		180,000
30		Sale	75		1,500		112,500
May 8		Purchase	150		600		90,000
10		Sale	90		1,500		135,000
19		Sale	45		1,500		67,500
28		Purchase	150		660		99,000
June 5		Sale	90		1,575		141,750
16		Sale	120		1,575		189,000
21		Purchase	270		720		194,400
28		Sale	135		1,575		212,625

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

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.

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