FIFO perpetual inventory The beginning inventory at Funky Patty Supplies and dat
ID: 2476165 • Letter: F
Question
FIFO perpetual inventory The beginning inventory at Funky Patty Supplies and data on purchases and sales for a three-month period ending March 31, 2016. 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 Exhibit 4. 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 gross profit from sales for the period. Determine the ending inventory cost as of March 31, 2016. Based upon the preceding data, would you expect the inventory using the last-in. first-out method to be higher or lower?Explanation / Answer
1 FIFO Opening Stock Purchase Total Stock Sales Closing Stock Avg Cost/Unit Sales revenue Date Unit Rate Value Unit Rate Value Unit Rate Value Unit Rate Value Unit Rate Value Jan 10. 2,500 60.00 150,000 - - - 2,500 150,000 - - - 2,500 150,000 60.00 Jan 10. 2,500 150,000 7,500.00 68.00 510,000 10,000 660,000 - - - 10,000 660,000 66.00 Jan 28. 10,000 660,000 - - 10,000 660,000 2,500.00 60.00 150,000 7,500 510,000 66.00 300,000 Jan 28. 7,500 510,000 - - 7,500 510,000 1,250.00 68.00 85,000 6,250 425,000 68.00 150,000 Jan 30. 6,250 425,000 - - - 6,250 425,000 1,250.00 68.00 85,000 5,000 340,000 68.00 150,000 Feb 5. 5,000 340,000 - - 5,000 340,000 500.00 68.00 34,000 4,500 306,000 68.00 60,000 Feb 10. 4,500 306,000 18,000.00 70.00 1,260,000 22,500 1,566,000 - - 22,500 1,566,000 69.60 Feb 16. 22,500 1,566,000 - - 22,500 1,566,000 4,500.00 68.00 306,000 18,000 1,260,000 69.60 562,500 Feb 16. 18,000 1,260,000 - 18,000 1,260,000 4,500.00 70.00 315,000 13,500 945,000 70.00 562,500 Feb 28. 13,500 945,000 - 13,500 945,000 8,500.00 70.00 595,000 5,000 350,000 70.00 1,062,500 Mar 5. 5,000 350,000 15,000.00 71.60 1,074,000 20,000 1,424,000 - 20,000 1,424,000 Mar 14. 20,000 1,424,000 - 20,000 1,424,000 5,000.00 70.00 350,000 15,000 1,074,000 625,000 Mar 14. 15,000 1,074,000 - 15,000 1,074,000 5,000.00 71.60 358,000 10,000 716,000 625,000 Mar 25. 10,000 716,000 2,500.00 72.00 180,000 12,500 896,000 8,750.00 71.60 626,500 3,750 269,500 1,093,750 Mar 30. 3,750 269,500 - 3,750 269,500 - 3,750 269,500 3,750 269,500 - 3,750 269,500 - 3,750 269,500 3,750 269,500 - 3,750 269,500 - 3,750 269,500 Total 43,000.00 3,024,000 41,750.00 2,904,500 5,191,250 - 2 Total Sales = 5,191,250 Total cost of merchandise sold= 2,904,500 3 Gross Profit from the sales 2,286,750 4 Ending inventory Mar 31= 269,500 5 As cost of inventory is increasing , using LIFO the inventory balance will be lower. q: 2 Account Entry : Combined for the month Account Title Dr $ Cr $ Sales Revenue 5,191,250 Accounts Receivable 5,191,250 Merchandise Inventory 2,904,500 Vost of Goods Sold 2,904,500
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