PLEASE ONLY USE THE TABLES AND FORMAT THAT I PROVIDED FIFO Perpetual Inventory T
ID: 2401971 • Letter: P
Question
PLEASE ONLY USE THE TABLES AND FORMAT THAT I PROVIDED
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:
Required:
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. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Merchandise Sold Unit Cost column and in the Inventory Unit Cost column.
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.
3. Determine the gross profit from sales for the period.
$
4. Determine the ending inventory cost as of June 30.
$
5. Based upon the preceding data, would you expect the inventory using the last-in, first-out method to be higher or lower?
of Units Per Unit Total Apr. 3 Inventory 54 $525 $28,350 8 Purchase 108 630 68,040 11 Sale 72 1,750 126,000 30 Sale 45 1,750 78,750 May 8 Purchase 90 700 63,000 10 Sale 54 1,750 94,500 19 Sale 27 1,750 47,250 28 Purchase 90 770 69,300 June 5 Sale 54 1,840 99,360 16 Sale 72 1,840 132,480 21 Purchase 162 840 136,080 28 Sale 81 1,840 149,040
Explanation / Answer
1. ON FIFO METHOD & PERPETUAL: Purchase Cost of Merchandise Sold Inventory Date Qty Unit Cost Total Cost Qty Unit Cost Total Cost Qty Unit cost Total Cost 3-Apr 54 525 28350 8 108 630 68040 162 595 96390 11 72 595 42840 90 595 53550 30 45 595 26775 45 595 26775 8-May 90 700 63000 135 665 89775 10 54 665 35910 81 665 53865 19 27 665 17955 54 665 35910 28 90 770 69300 144 730.625 105210 5-Jun 54 730.625 39453.75 90 730.625 65756.25 16 72 730.625 52605 18 730.625 13151.25 21 162 840 136080 180 829.0625 149231.3 28 81 829.0625 67154.06 99 829.0625 82077.19 30 99 829.0625 82077.19 Total 282692.8 Sales revenue (72+45+54+27)*1750 + (54+72+81)*1840=727380 2.Journal Entries: Date Accounts Titles Debit Credit 30-Jun Accounts Receivable 727380 Sales Revenue 727380 30-Jun COMS 282692.8 Inventory 282692.8 3. Gross profit = sales value - COMS = 727380-282692.80= $444687.20 4. Ending inventory cost as of June 30 = 82077.19 5. If LIFO method is used, then ending inventory would at the lower level of present level because purchase price has been increase on every other purchase.
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