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	78		$450		$35,100
8		Purchase	156		540		84,240
11		Sale	104		1,500		156,000
30		Sale	65		1,500		97,500
May 8		Purchase	130		600		78,000
10		Sale	78		1,500		117,000
19		Sale	39		1,500		58,500
28		Purchase	130		660		85,800
June 5		Sale	78		1,575		122,850
16		Sale	104		1,575		163,800
21		Purchase	234		720		168,480
28		Sale	117		1,575		184,275

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.

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.

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