FIFO perpetual inventory Instructions FIFO Chart of Accounts Journal Final Quest
ID: 2468435 • Letter: F
Question
FIFO perpetual inventory
Instructions
FIFO
Chart of Accounts
Journal
Final Questions
Instructions
The beginning inventory of merchandise at Dunne Co. and data on purchases and sales for a three-month period ending June 30, 2016, are as follows:
Date
Exhibit 4
FIFO
1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in
Exhibit 4
, using the first-in, first-out method.
Chart of Accounts
Journal
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, and date your journal entry June 30. Refer to the Chart of Accounts for exact wording of account titles.
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JOURNAL
1
2
3
4
Final Questions
3. Determine the gross profit from sales for the period.
4. Determine the ending inventory cost on June 30, 2016.
5. Based upon the preceding data, would you expect the inventory using the last-in, first-out method to be higher or lower?
Lower
Higher
Date
Transaction Number of Units Per Unit Total Apr. 3 Inventory 25 $1,200 $30,000 8 Purchase 75 1,240 93,000 11 Sale 40 2,000 80,000 30 Sale 30 2,000 60,000 May 8 Purchase 60 1,260 75,600 10 Sale 50 2,000 100,000 19 Sale 20 2,000 40,000 28 Purchase 80 1,260 100,800 June 5 Sale 40 2,250 90,000 16 Sale 25 2,250 56,250 21 Purchase 35 1,264 44,240 28 Sale 44 2,250 99,000Explanation / Answer
Answer-1 First In First Out Method Date Purchase Cost of mercahndise sold Inventory 2016 Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost APR . 3 25 1200 30000 25 1200 30000 8 25 1200 3000 8 75 1240 93000 75 1240 93000 11 25 1200 30000 11 15 1240 18600 60 1240 74400 30 30 1240 37200 30 1240 37200 May .8 30 1240 37200 8 60 1260 75600 60 1260 75600 10 30 1240 37200 10 20 1260 25200 40 1260 50400 19 20 1260 25200 20 1260 25200 28 20 1260 25200 28 80 1260 100800 80 1260 100800 Jun. 5 20 1260 25200 5 20 1260 25200 60 1260 75600 16 25 1260 31500 35 1260 44100 21 35 1260 44100 21 35 1264 44240 35 1264 44240 28 35 1260 44100 28 9 1264 11376 26 1264 32864 30 Balances 249 310776 26 1264 32864 Answer-2 Total Sales Date Quantity Rate Amount Apr-11 40 2000 80000 Apr-30 30 2000 60000 May-10 50 2000 100000 May-19 20 2000 40000 Jun -5 40 2250 90000 Jun -16 25 2250 56250 Jun -28 44 2250 99000 Total 249 525250 Journal Entries Date Description Post ref Debit Credit Jun -30 Accounts Receivables 525250 Sales 525250 Jun -30 Cost of Merchandise Sold 310776 Merchandise Inventory 310776 Answer-3 Gross Profit Sales 525250 Cost of Merchandise Sold 310776 Gross Profit 214474 Answer 4 Ending Inventory cost 26 Units @ 1264 32864 Answer- 5 Last In First Out Method Date Purchase Cost of mercahndise sold Inventory 2016 Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost APR . 3 25 1200 30000 25 1200 30000 8 25 1200 3000 8 75 1240 93000 75 1240 93000 11 40 1240 49600 25 1200 30000 11 35 1240 43400 30 30 1240 37200 25 1200 30000 30 5 1240 6200 May .8 25 1200 30000 5 1240 6200 8 60 1260 75600 60 1260 75600 10 50 1260 63000 25 1200 30000 10 5 1240 6200 10 10 1260 12600 19 10 1260 12600 19 5 1240 6200 19 5 1200 6000 20 1200 24000 28 20 1200 24000 28 80 1260 100800 80 1260 100800 Jun. 5 40 1260 50400 20 1200 24000 5 40 1260 50400 16 25 1260 31500 20 1200 24000 16 15 1260 18900 21 20 1200 24000 21 15 1260 18900 21 35 1264 44240 35 1264 44240 28 35 1264 44240 20 1200 24000 28 9 1260 11340 6 1260 7560 30 Balance 20 1200 24000 6 1260 7560 As we compare balance unit cost as per Method Unit Cost FIFO 26 32864 LIFO 26 31560 LIFO method can be use for Lower the Inventory value.
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