Question

LIFO Perpetual Inventory

The beginning inventory of merchandise 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	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 merchandise 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 Merchandise Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column.

Dunne Co. Schedule of Cost of Merchandise Sold LIFO Method For the three months ended June 30
	Purchases			Cost of Merchandise 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 merchandise sold, and the gross profit from sales for the period.

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

3. Determine the ending inventory cost on June 30.
$

Answer 1

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Dunne Co.
Schedule of Cost of Merchandise Sold
LIFO Method
For the three months ended June 30
	Purchases			Cost of Merchandise Sold			Inventory
Date	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
Apr. 3	42	$      525	$       22,050				42	$      525	$      22,050
Apr. 8	84	$      630	$       52,920				42	$      525	$      22,050
							84	$      630	$      52,920
Apr. 11				56	$                   630	$                           35,280	42	$      525	$      22,050
							28	$      630	$      17,640
Apr. 30				28	$                   630	$                           17,640	35	$      525	$      18,375
				7	$                   525	$                             3,675
May-08	70	$      700	$       49,000				35	$      525	$      18,375
							70	$      700	$      49,000
May-10				42	$                   700	$                           29,400	35	$      525	$      18,375
							28	$      700	$      19,600
May-19				21	$                   700	$                           14,700	35	$      525	$      18,375
							7	$      700	$        4,900
May-28	70	$      770	$       53,900				35	$      525	$      18,375
							7	$      700	$        4,900
							70	$      770	$      53,900
Jun-05				42	$                   770	$                           32,340	35	$      525	$      18,375
							7	$      700	$        4,900
							28	$      770	$      21,560
Jun-16				28	$                   770	$                           21,560	14	$      525	$        7,350
				7	$                   700	$                             4,900
				21	$                   525	$                           11,025
Jun-21	126	$      840	$     105,840				14	$      525	$        7,350
							126	$      840	$     105,840
Jun-28				63	$                   840	$                           52,920	14	$      525	$        7,350
							63	$      840	$      52,920
Jun-30						$                          223,440			$      60,270
Part 2
Total Sales		$ 565,740
Less: Cost of merchandise sold		$ 223,440
Gross Margin		$ 342,300
Part 3
Ending Inventory Cost		$   60,270