FIFO perpetual inventory The beginning inventory at RTE Office Supplies and data
ID: 2464229 • Letter: F
Question
FIFO perpetual inventory The beginning inventory at RTE Office Supplies and data on purchases and sales for a three-month period ending August 31, 2014, are as follows: Instructions Record the inventory purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Fxhibit 3, using the first-in. first-out method. 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. Determine the grovs profit from sales for the period. Determine the ending inventory- cost as of August 31. 2014. Based upon the preceding data, would you expect the inventory using the last-in, first-out method to be higher or lower?Explanation / Answer
2)
Total cost of merchandise sold = $289730
3)
Accounts receivable.................................Dr. $483800
Sales.......................................................................Cr. $483800
Cost of goods sold...................................Dr. $289730
Inventory..................................................................Cr. $289730
3)
Gross profit = $483800 - $289730 = $194070
4)
Ending inventory cost = $59170
5) The cost of the merchandise is continuously increasing. Under LIFO the last purchases will be sold first. As this is an inflationary situation, using LIFO will give a lower cost of inventory than FIFO.
Date Goods Purchased Cost of goods sold Inventory Balance No. Of units Cost perunit no. Of units cost per unit cost of goods sold no of units cost per unit ($) inventory balance Jun-01 500 @ 30.00 = 15000 Jun-10 1500 @ 34 1500 @ 34.00 = 51000 Total 2000 66000 Jun-28 500 @ 30 = 15000 250 @ 34 = 8500 Jun-30 250 @ 34 = 8500 1000 @ 34.00 = 34000 Total 1000 32000 1000 34000 Jul-05 100 @ 34 = 3400 900 @ 34.00 = 30600 Total 1100 35400 900 30600 Jul-10 3600 @ 35 3600 @ 35.00 = 126000 Total 1100 35400 4500 156600 Jul-16 900 @ 34 = 30600 900 @ 35 = 31500 3600 @ 35.00 = 126000 Jul-28 1700 @ 35 = 59500 1900 @ 35.00 = 66500 Total 4600 157000 1900 66500 Aug-05 3000 @ 35.8 3000 @ 35.80 = 107400 Total 4600 157000 4900 173900 Aug-14 1900 @ 35 = 66500 100 @ 35.8 = 3580 2900 @ 35.80 = 103820 Total 6600 227080 2900 103820 Aug-25 500 @ 36 500 @ 36.00 = 18000 Total 6600 227080 3400 121820 Aug-30 1750 @ 35.8 = 62650 1150 @ 35.80 = 41170 500 @ 36 = 18000 Total 8350 289730 1650 59170Related Questions
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