FIFO Perpetual Inventory The beginning inventory of merchandise at Keats Office
ID: 2445008 • Letter: F
Question
FIFO Perpetual Inventory
The beginning inventory of merchandise at Keats Office Supplies and data on purchases and sales for a three-month period ending May 31, 2014, 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. If units are in inventory at two different costs, enter the OLDEST units first.
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 May 31, 2014.
$
5. Based upon the preceding data, would you expect the inventory using the last-in, first-out method to be higher or lower?
SelectHigherLowerItem 103
of Units Per Unit Total March 1 Inventory 84 $225 $18,900 10 Purchase 168 270 45,360 28 Sale 112 750 84,000 30 Sale 70 750 52,500 April 5 Purchase 140 300 42,000 10 Sale 84 750 63,000 16 Sale 42 750 31,500 28 Purchase 140 330 46,200 May 5 Sale 84 790 66,360 14 Sale 112 790 88,480 25 Purchase 252 360 90,720 30 Sale 126 790 99,540
Explanation / Answer
1.
2.
Total Cost for the merchandise = $ 1,78,920
Total Sales = $ 4,85,380
3. Gross Profit = Rs. 3,01,000
4. Inventory cost as of May 31 2014, = Rs.55,440
5.
As per LIFO Method Stock Value is lower than FIFO
Purchases Cost of Merchandise Sold Inventory Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost 1/3/2014 84 225 18900 10/3/2014 168 270 45360 84 225 18900 168 270 45360 28/03/2014 112 750 84000 140 270 37800 30/03/2014 70 750 52500 70 270 18900 5/4/2014 140 300 42000 70 270 18900 140 300 42000 10/4/2014 84 750 63000 126 300 37800 16/04/2014 42 750 31500 84 300 25200 28/04/2014 140 330 46200 84 300 25200 140 330 46200 5/5/2014 84 790 66360 140 330 46200 14/05/2014 112 790 88480 28 330 9240 25/05/2014 252 360 90720 28 330 9240 252 360 90720 30/05/2014 126 790 99540 154 360 55440Related Questions
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