FIFO Perpetual Inventory The beginning inventory at Dunne Co. and data on purcha

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: Date Transaction of Units Per Unit Total Apr. 3 Inventory 42 $450 540 1,500 1,500 600 $18,900 45,360 84,000 52,500 42,000 63,000 31,500 46,200 66,150 88,200 90,720 99,225 8 Purchase 11 Sale 30 Sale May 8 Purchase 10 Sale 19 Sale 56 35 70 42 21 70 42 56 126 63 1,500 660 1,575 1,575 720 1,575 28 Purchase June S Sale 16 Sale 21 Purchase 28 Sale Required: 1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibilt 3, using the first-in, first-out method. Under PIPO, 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.

Explanation / Answer

Purchases Cost of Goods sold Inventory Date Quantity Unit Cost Total COST Quantity Unit Cost Total COST Quantity Unit Cost Total COST 03-Apr 42 450 18900 08-Apr 84 540 45360 42 450 18900 84 540 45360 11-Apr 42 450 18900 14 540 7560 70 540 37800 (56-42) (84-14) 30-Apr 35 540 18900 35 540 18900 (70-35) 08-May 70 600 42000 35 540 18900 70 600 42000 10-May 35 540 18900 7 600 4200 63 600 37800 (42-35) (70-7) 19-May 21 600 12600 42 600 25200 (63-21) 28-May 70 660 46200 42 600 25200 70 660 46200 05-Jun 42 600 25200 70 660 46200 16-Jun 56 660 36960 14 660 9240 (70-56) 21-Jun 126 720 90720 14 660 9240 126 720 90720 28-Jun 14 660 9240 49 720 35280 77 720 55440 (63-14) (126-49) 30-Jun Balances 187740 55440 2 Record Sales Accounts Receiavble 484575 =84000+52500+63000+31500+66150+88200+99225 Sales 484575 Record Cost Cost of goods sold 187740 Inventory 187740 3 Gross Profit 296835 (484575-187740) 4 Ending Inventory 55440 5 Lower Because cost in increasing and in last in fist out method last purcahsed which means high price inventory would be sold and low cost which means earlier purchased will be there in closing inventory.

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