Question

In: Accounting

The beginning inventory of merchandise at Rhodes Co. and data on purchases and sales for a...

The beginning inventory of merchandise at Rhodes 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 60 $375 $22,500
8 Purchase 120 450 54,000
11 Sale 80 1,250 100,000
30 Sale 50 1,250 62,500
May 8 Purchase 100 500 50,000
10 Sale 60 1,250 75,000
19 Sale 30 1,250 37,500
28 Purchase 100 550 55,000
June 5 Sale 60 1,315 78,900
16 Sale 80 1,315 105,200
21 Purchase 180 600 108,000
28 Sale 90 1,315 118,350

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.

Rhodes Co.
Perpetual Inventory Account
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 $

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

Solutions

Expert Solution

Solution: 1
Schedule of Cost of Merchandise Sold
LIFO METHOD
COST OF GOODS AVAILABLE FOR SALE COST OF GOODS SOLD ENDING INVENTORY
Date Particulars No. of Units Cost Per unit Total No. of Units Cost Per unit Cost of Goods Sold No. of Units Cost Per unit Ending invetory
Apr.03 Beginning inventory 60 $            375 $22,500
Apr.08 Purchases 120 $                 450 $54,000 60 $            375 $22,500
120 $            450 $54,000
Apr.11 Sales 80 $            450 $36,000 40 $            450 $18,000
60 $            375 $22,500
Apr.30 Sales 40 $            450 $18,000
10 $            375 $3,750 50 $            375 $18,750
May.08 Purchases 100 $                 500 $50,000 100 $            500 $50,000
50 $            375 $18,750
May.10 Sales 60 $            500 $30,000 40 $            500 $20,000
50 $            375 $18,750
May.19 Sales 30 $            500 $15,000 10 $            500 $5,000
50 $            375 $18,750
May.28 Purchases 100 $                 550 $55,000 100 $            550 $55,000
10 $            500 $5,000
50 $            375 $18,750
June.05 Sales 60 $            550 $33,000 40 $            550 $22,000
10 $            500 $5,000
50 $            375 $18,750
June.16 Sales 40 $            550 $22,000
10 $            500 $5,000
30 $            375 $11,250 20 $            375 $7,500
June.21 Purchases 180 $                 600 $108,000 180 $            600 $108,000
20 $            375 $7,500
June.28 Sales 90 $            600 $54,000 90 $            600 $54,000
20 $            375 $7,500
Total Goods Available For sale                        500 $267,000                    450 $228,000                    110 $61,500
Solution: 2
Sales :
Apr.11 $           100,000
Apr.30 $             62,500
May.10 $             75,000
May.19 $             37,500

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