Periodic Inventory by Three Methods The beginning inventory at Midnight Supplies

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:

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.

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.

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.

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

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

Explanation / Answer

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

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