Question

In: Accounting

The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period...

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 2,500 $52.00 $130,000
10 Purchase 7,800 60.00 468,000
28 Sale 3,750 104.00 390,000
30 Sale 1,200 104.00 124,800
Feb. 5 Sale 500 104.00 52,000
10 Purchase 17,500 62.00 1,085,000
16 Sale 8,600 109.00 937,400
28 Sale 8,900 109.00 970,100
Mar. 5 Purchase 14,200 63.60 903,120
14 Sale 10,200 109.00 1,111,800
25 Purchase 3,400 64.00 217,600
30 Sale 7,900 109.00 861,100
Instructions
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.
2. Determine the total sales and the total cost of merchandise sold for the period. Journalize the entries in the sales and cost of merchandise sold accounts. Assume that all sales were on account and date your journal entry March 31. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
3. Determine the gross profit from sales for the period.
4. Determine the ending inventory cost as of March 31.
5. Based upon the preceding data, would you expect the inventory using the last-in, first-out method to be higher or lower?

FIFO

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.

Date Purchases Cost of Merchandise Sold Inventory
Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost
Jan. 1
10
10
28
28
30
Feb. 5
10
10
16
16
28
Mar. 5
5
14
14
25
25
30
30
31 Balances

Chart of Accounts

CHART OF ACCOUNTS
Midnight Supplies
General Ledger
ASSETS
110 Cash
111 Petty Cash
120 Accounts Receivable
131 Notes Receivable
132 Interest Receivable
141 Merchandise Inventory
145 Office Supplies
146 Store Supplies
151 Prepaid Insurance
181 Land
191 Office Equipment
192 Accumulated Depreciation-Office Equipment
193 Store Equipment
194 Accumulated Depreciation-Store Equipment
LIABILITIES
210 Accounts Payable
221 Notes Payable
222 Interest Payable
231 Salaries Payable
241 Sales Tax Payable
EQUITY
310 Owner, Capital
311 Owner, Drawing
312 Income Summary
REVENUE
410 Sales
610 Interest Revenue
EXPENSES
510 Cost of Merchandise Sold
515 Credit Card Expense
516 Cash Short and Over
520 Salaries Expense
531 Advertising Expense
532 Delivery Expense
533 Insurance Expense
534 Office Supplies Expense
535 Rent Expense
536 Repairs Expense
537 Selling Expenses
538 Store Supplies Expense
561 Depreciation Expense-Office Equipment
562 Depreciation Expense-Store Equipment
590 Miscellaneous Expense
710 Interest Expense

Journal

2. Determine the total sales and the total cost of merchandise sold for the period. Journalize the entries in the sales and cost of merchandise sold accounts. Assume that all sales were on account and date your journal entry March 31. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

1

2

3

4

Final Questions

3. Determine the gross profit from sales for the period.

4. Determine the ending inventory cost as of March 31.

5. Based upon the preceding data, would you expect the inventory using the last-in, first-out method to be higher or lower?

Lower

Higher

Solutions

Expert Solution


Related Solutions

The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period...
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 2,500 $52.00 $130,000 10 Purchase 7,800 60.00 468,000 28 Sale 3,750 104.00 390,000 30 Sale 1,200 104.00 124,800 Feb. 5 Sale 500 104.00 52,000 10 Purchase 17,500 62.00 1,085,000 16 Sale 8,600 109.00 937,400 28 Sale 8,900 109.00 970,100 Mar. 5 Purchase 14,200 63.60 903,120 14 Sale...
The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period...
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...
The beginning inventory for Midnight Supplies and data on purchases and sales for a three-month period...
The beginning inventory for Midnight Supplies and data on purchases and sales for a three-month period are shown below: 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...
The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period...
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 2,500 $64.00 $160,000 10 Purchase 7,600 72.00 547,200 28 Sale 3,700 128.00 473,600 30 Sale 1,400 128.00 179,200 Feb. 5 Sale 500 128.00 64,000 10 Purchase 18,500 74.00 1,369,000 16 Sale 8,900 133.00 1,183,700 28 Sale 8,500 133.00 1,130,500 Mar. 5 Purchase 15,000 75.60 1,134,000 14 Sale...
The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period...
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 2,500 $70.00 $175,000 10 Purchase 8,000 78.00 624,000 28 Sale 3,800 140.00 532,000 30 Sale 1,250 140.00 175,000 Feb. 5 Sale 500 140.00 70,000 10 Purchase 17,000 80.00 1,360,000 16 Sale 9,100 145.00 1,319,500 28 Sale 8,700 145.00 1,261,500 Mar. 5 Purchase 14,300 81.60 1,166,880 14 Sale...
The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period...
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...
The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period...
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 2,500 $52.00 $130,000 10 Purchase 7,800 60.00 468,000 28 Sale 3,750 104.00 390,000 30 Sale 1,200 104.00 124,800 Feb. 5 Sale 500 104.00 52,000 10 Purchase 17,500 62.00 1,085,000 16 Sale 8,600 109.00 937,400 28 Sale 8,900 109.00 970,100 Mar. 5 Purchase 14,200 63.60 903,120 14 Sale...
he beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period...
he 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...
The beginning inventory for Midnight Supplies and data on purchases and sales for a three month...
The beginning inventory for Midnight Supplies and data on purchases and sales for a three month period 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...
The beginning inventory at Midnight Supplies and data on purchases and sales for a three month...
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 2,500 $70.00 $175,000 10 Purchase 8,000 78.00 624,000 28 Sale 3,800 140.00 532,000 30 Sale 1,250 140.00 175,000 Feb. 5 Sale 500 140.00 70,000 10 Purchase 17,000 80.00 1,360,000 16 Sale 9,100 145.00 1,319,500 28 Sale 8,700 145.00 1,261,500 Mar. 5 Purchase 14,300 81.60 1,166,880 14...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT