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FIFO Perpetual Inventory The beginning inventory of merchandise at Dunne Co. and

ID: 2400011 • Letter: F

Question

FIFO 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: Number Per Unit $600 720 2,000 2,000 800 2,000 2,000 880 Total $50,400 120,960 224,000 140,000 112,000 168,000 84,000 123,200 176,400 235,200 241,920 264,600 Date Transaction of Units 84 168 112 70 140 84 Apr. 3 Inventory 8 Purchase 11 Sale 30 Sale May 8 Purchase 10 Sale 19 Sale 28 Purchase 140 84 112 252 126 2,100 2,100 960 2,100 June 5 Sale 16 Sale 21 Purchase 28 Sale

Explanation / Answer

Dunne Co

Schedule of Cost of Merchandise Sold

FIFO method

For the three month ended June 30th 2016.

Purchases

Cost of Merchandise Sold

Inventory

Date

Quantity

Unit Cost

Total Cost

Quantity

Unit Cost

Total Cost

Quantity

Unit Cost

Total Cost

3-Apr

84

$              600.00

$       50,400.00

84

$ 600.00

$       50,400.00

8-Apr

168

$              720.00

$     120,960.00

84

$ 600.00

$       50,400.00

168

$ 720.00

$     120,960.00

11-Apr

84

$     600.00

$    50,400.00

140

$ 720.00

$     100,800.00

28

$     720.00

$    20,160.00

30-Apr

70

$     720.00

$    50,400.00

70

$ 720.00

$       50,400.00

8-May

140

$              800.00

$     112,000.00

70

$ 720.00

$       50,400.00

140

$ 800.00

$     112,000.00

10-May

70

$     720.00

$    50,400.00

126

$ 800.00

$     100,800.00

14

$     800.00

$    11,200.00

19-May

42

$    800.00

$    33,600.00

84

$ 800.00

$       67,200.00

28-May

140

$              880.00

$     123,200.00

84

$ 800.00

$       67,200.00

140

$ 880.00

$     123,200.00

5-Jun

84

$    800.00

$    67,200.00

140

$ 880.00

$     123,200.00

16-Jun

112

$     880.00

$    98,560.00

28

$ 880.00

$       24,640.00

21-Jun

252

$              960.00

$     241,920.00

28

$ 880.00

$       24,640.00

252

$ 960.00

$     241,920.00

28-Jun

28

$     880.00

$    24,640.00

154

$ 960.00

$     147,840.00

98

$     960.00

$    94,080.00

Total

784

$ 648,480.00

630

500640

154

$ 147,840.00

2

Gross profit calculation

Sales

$ 1,292,200.00

Less: Cost of goods sold

$      500,640.00

Gross profit

$      791,560.00

3

Ending Inventory cost as of June 30

$      147,840.00

4

If Last in first out is used the Inventory cost would be lower as products purchased earlier would be in inventory and prices are rising.

Dunne Co

Schedule of Cost of Merchandise Sold

FIFO method

For the three month ended June 30th 2016.

Purchases

Cost of Merchandise Sold

Inventory

Date

Quantity

Unit Cost

Total Cost

Quantity

Unit Cost

Total Cost

Quantity

Unit Cost

Total Cost

3-Apr

84

$              600.00

$       50,400.00

84

$ 600.00

$       50,400.00

8-Apr

168

$              720.00

$     120,960.00

84

$ 600.00

$       50,400.00

168

$ 720.00

$     120,960.00

11-Apr

84

$     600.00

$    50,400.00

140

$ 720.00

$     100,800.00

28

$     720.00

$    20,160.00

30-Apr

70

$     720.00

$    50,400.00

70

$ 720.00

$       50,400.00

8-May

140

$              800.00

$     112,000.00

70

$ 720.00

$       50,400.00

140

$ 800.00

$     112,000.00

10-May

70

$     720.00

$    50,400.00

126

$ 800.00

$     100,800.00

14

$     800.00

$    11,200.00

19-May

42

$    800.00

$    33,600.00

84

$ 800.00

$       67,200.00

28-May

140

$              880.00

$     123,200.00

84

$ 800.00

$       67,200.00

140

$ 880.00

$     123,200.00

5-Jun

84

$    800.00

$    67,200.00

140

$ 880.00

$     123,200.00

16-Jun

112

$     880.00

$    98,560.00

28

$ 880.00

$       24,640.00

21-Jun

252

$              960.00

$     241,920.00

28

$ 880.00

$       24,640.00

252

$ 960.00

$     241,920.00

28-Jun

28

$     880.00

$    24,640.00

154

$ 960.00

$     147,840.00

98

$     960.00

$    94,080.00

Total

784

$ 648,480.00

630

500640

154

$ 147,840.00