FIFO Perpetual Inventory The beginning inventory at Dunne Co. and data on purcha
ID: 2395912 • Letter: F
Question
FIFO Perpetual Inventory
The beginning inventory 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 Goods Sold Unit Cost column and in the Inventory Unit Cost column.
2. Determine the total sales and the total cost of goods sold for the period. Journalize the entries in the sales and cost of goods 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 ending inventory using the last-in, first-out method to be higher or lower?
of Units Per Unit Total Apr. 3 Inventory 48 $525 $25,200 8 Purchase 96 630 60,480 11 Sale 64 1,750 112,000 30 Sale 40 1,750 70,000 May 8 Purchase 80 700 56,000 10 Sale 48 1,750 84,000 19 Sale 24 1,750 42,000 28 Purchase 80 770 61,600 June 5 Sale 48 1,840 88,320 16 Sale 64 1,840 117,760 21 Purchase 144 840 120,960 28 Sale 72 1,840 132,480
Explanation / Answer
STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL FIFO METHOD RECIEPTS COST OF GOODS SOLD BALANCE DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ 3-Apr 48 525 25200 8-Apr 96 630 60480 48 525 25200 96 620 60480 11-Apr 48 525 25200 16 620 9920 80 620 49600 30-Apr 40 620 24800 40 620 24800 8-May 80 700 56000 40 620 24800 80 700 56000 10-May 40 620 24800 8 700 5600 72 700 50400 19-May 24 700 16800 48 700 33600 28-May 80 770 61600 48 700 33600 80 770 61600 5-Jun 48 700 33600 80 770 61600 16-Jun 64 770 49280 16 770 12320 21-Jun 144 840 120960 16 770 12320 144 840 120960 28-Jun 16 770 12320 56 840 47040 88 840 73920 TOTAL 400 299040 360 249360 88 73920 Total Sales 646560 (112000+70000+84000+42000+88320+117760+132480) Total cost of goods sold 249360 Journal entry: Accounts receivable Account Dr. 646560 Sales revenue Account 646560 Cost of goods sold Account Dr. 249360 Inventory Account 249360 Req: Gross profitt: Total sales 646560 Less: COGS 249360 Gross profitt: 397200 Req Ending inventory: 73920 Req Lower, the invnentory under LIFO will be lower.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.