Question

LIFO Perpetual Inventory

The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period ending March 31 are as follows:

Date		Transaction	Number of Units		Per Unit		Total
Jan. 1		Inventory	7,500		$75.00		$562,500
10		Purchase	22,500		85.00		1,912,500
28		Sale	11,250		150.00		1,687,500
30		Sale	3,750		150.00		562,500
Feb. 5		Sale	1,500		150.00		225,000
10		Purchase	54,000		87.50		4,725,000
16		Sale	27,000		160.00		4,320,000
28		Sale	25,500		160.00		4,080,000
Mar. 5		Purchase	45,000		89.50		4,027,500
14		Sale	30,000		160.00		4,800,000
25		Purchase	7,500		90.00		675,000
30		Sale	26,250		160.00		4,200,000

Required:

1. Record the inventory, purchases, and cost of goods 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 Goods Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column. Round unit cost to two decimal places, if necessary.

Midnight Supplies Schedule of Cost of Goods Sold LIFO Method For the Three Months Ended March 31
	Purchases			Cost of Goods Sold			Inventory
Date	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
Jan. 1								$	$
Jan. 10		$	$
Jan. 28					$	$
Jan. 30
Feb. 5
Feb. 10
Feb. 16
Feb. 28
Mar. 5
Mar. 14
Mar. 25
Mar. 30
Mar. 31	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	$

3. Determine the ending inventory cost as of March 31.
$

Answer 1

LIFO Method
For the Three Months Ended March 31
	Purchases			Cost of Goods Sold			Inventory
Date	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
Jan. 1							7500	75	562500
Jan. 10	22500	85	1912500	0	85	0	7500	75	562500
							22500	85	1912500
Jan. 28				11,250	85	956250	7500	75	562500
							11,250	85	956250
Jan. 30				3,750	85	318750	7500	75	562500
							7,500	85	637,500
Feb. 5				1,500	85	127500	7,500	75	562,500
							6,000	85	510,000
Feb. 10	54000	87.5	4725000	0	87.5	0	7,500	75	562,500
							22500	85	1912500
							37,500	87.5	3281250
Feb. 16				27,000	87.5	2362500	7,500	75	562,500
							22500	85	1912500
							10,500	87.5	918750
Feb. 28				25,500	87.5	2231250	7,500	75	562500
							7,500	85	637500
							0	87.5	0
Mar. 5	45000	89.5	4027500	0	89.5	0	7500	75	562500
							22500	85	1912500
							15000	87.5	1312500
							15,000	89.5	1342500
Mar. 14				30000	89.5	2685000	7500	75	562500
							22,500	85	1912500
							0	87.5	0
							0	89.5	0
Mar. 25	7500	90	675000	0	90	0	7500	75	562500
							22,500	85	1912500
							0	87.5	0
							7500	89.5	671250
							0	90	0
Mar. 30				26250	90	2362500	7500	75	562500
							3,750	85	318750
							0	87.5	0
							0	89.5	0
Mar. 31	Balances			11250	90	1012500			881250

Total sales	19,875,000
Total cost of goods sold	12,056,250
Gross profit	7,818,750

3.

881250