Question

Periodic Inventory by Three Methods

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. Determine the inventory on March 31 and the cost of merchandise sold for the three-month period, using the first-in, first-out method and the periodic inventory system.

Merchandise inventory, March 31	$
Cost of merchandise sold	$

2. Determine the inventory on March 31 and the cost of merchandise sold for the three-month period, using the last-in, first-out method and the periodic inventory system.

Merchandise inventory, March 31	$
Cost of merchandise sold	$

3. Determine the inventory on March 31 and the cost of merchandise sold for the three month period, using the weighted average cost method and the periodic inventory system. Round the weighted average unit cost to the nearest cent and final answers to the nearest dollar.

Merchandise inventory, March 31	$
Cost of merchandise sold	$

4. Compare the gross profit and the March 31 inventories, using the following column headings. Enter all amounts as positive numbers.

	FIFO	LIFO	Weighted Average
Sales	$	$	$
Cost of merchandise sold
Gross profit	$	$	$
Inventory, March 31	$	$	$

Answer 1

STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC FIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan	7500	75	562500	7500	75	562500
Purchasse
10-Jan	22500	85	1912500	22500	85	1912500
10-Feb	54000	87.5	4725000	54000	87.5	4725000
5-Mar	45000	89.5	4027500	41250	89.5	3691875	3750	89.5	335625
25-Mar	7500	90	675000				7500	90	675000
TOTAL	136500		11,902,500	125250		10891875	11250		1010625
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC LIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan	7500	75	562500				7500	75	562500
Purchasse
10-Jan	22500	85	1912500	18750	85	1593750	3750	85	318750
10-Feb	54000	87.5	4725000	54000	87.5	4725000
5-Mar	45000	89.5	4027500	45000	89.5	4027500
25-Mar	7500	90	675000	7500	90	675000
TOTAL	136500		11,902,500	125250		11021250	11250		881250
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC WEIGHTED AVERAGE METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan	7500	75	562500
Purchasse
10-Jan	22500	85	1912500
10-Feb	54000	87.5	4725000
5-Mar	45000	89.5	4027500
25-Mar	7500	90	675000
TOTAL	136500	87.2	11,902,500	125250	87.2	10921800	11250	87.2	980700
REQ1-2-3
			FIFO	LIFO	Weighted
Merchandise Inventory			1010625	881250	980700
Cost of Merchandise sold			10891875	11021250	10921800
Req 4
GROSS PROFIT
			FIFO	LIFO	Weighted
Sales			19875000	19875000	19875000
Cost of Merchandise sold			10891875	11021250	10921800
Gross Profit			8983125	8853750	8953200
Merchandise Inventory			1010625	881250	980700