3 12-28: UFO liquidation in an interim reporting period 4 5 Assume that our records include the following two UFO inventory cost pools: 6 UNITS COST/UNIT 7 Beginning of Quarter Inventory 840 $ 30 1,120 $ 40 8 9 10 At the beginning of the quarter (BOQ), we report 840 units on hand at a cost of $30 per unit. 11 During the quarter, we sell 1,400 units at $65/unit for cash. Assume that we expect to 12 increase our quantities of inventories on hand by year-end by the purchase of inventories at 13 a cost of $45. 14 15. 16 17 a. Compute the gross profit we should recognize on the sales during the quarter. 18 19 20 21 22 23 b. Prepare the required journal entries to record the sales. 24 25 26 27 28 29 30 c. What adjusting entry will be required at year-end if the planned replacement of the inventories does not occur? 31 32 33 34 35 36 +