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 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. Round unit cost to two decimal places, if necessary.

Midnight Supplies Schedule of Cost of Merchandise Sold LIFO Method For the three months ended March 31
	Purchases			Cost of Merchandise 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 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 as of March 31.
$

Answer 1

STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL LIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan							7500	75	562500
10-Jan	22500	85	1912500				7500	75	562500
							22500	85	1912500
28-Jan				11250	85	956250	7500	75	562500
							11250	85	956250
30-Jan				3750	85	318750	7500	75	562500
							7500	85	637500
5-Feb				1500	85	127500	7500	75	562500
							6000	85	510000
10-Feb	54000	87.5	4725000				7500	75	562500
							6000	85	510000
							54000	87.5	4725000
16-Feb				27000	87.5	2362500	7500	75	562500
							6000	85	510000
							27000	87.5	2362500
28-Feb				25500	87.5	2231250	7500	75	562500
							6000	85	510000
							1500	87.5	131250
5-Mar	45000	89.5	4027500				7500	75	562500
							6000	85	510000
							1500	87.5	131250
							45000	89.5	4027500
14-Mar				30000	89.5	2685000	7500	75	562500
							6000	85	510000
							1500	87.5	131250
							15000	89.5	1342500
25-Mar	7500	90	675000				7500	75	562500
							6000	85	510000
							1500	87.5	131250
							15000	89.5	1342500
							7500	90	675000
30-Mar				7500	90	675000
				15000	89.5	1342500
				1500	87.5	131250	7500	75	562500
				2250	85	191250	3750	85	318750
TOTAL	129000		11340000	125250		11021250	11250		881250
Total Sales: (1687500+562500+225000+4320000+4080000+4800000+4200000):								19875000
Total Sales			19875000
Less: Cost of goods sold			11021250
Gross profit			8853750
Ending inventory: $ 881250