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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 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?

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