FIFO perpetual inventory Instructions Chart of Accounts FIFO Journal Final Questions Instructions The beginning inventory at Midnight Supplies and data on purchases and sales for a three month period ending March 31 are as follows: Date Transaction Number of Units Per Unit Total Jan. 1 Inventory 3,000 $56.00 $168,000 10 Purchase 7,100 64.00 454,400 28 Sale 4,200 112.00 470,400 30 Sale 1,300 112.00 145,600 Feb. 5 Sale 500 112.00 56,000 10 Purchase 18,500 66.00 1,221,000 16 Sale 8,900 117.00 1,041,300 28 28 Sale 8,200 117.00 959,400 Mar. 5 Purchase 14,500 67.60 980,200 14 Sale 10,000 117.00 1,170,000 25 25 Purchase 3,400 68.00 231,200 30 Sale 8,000 117.00 936,000 Instructions 1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in Exhibit 3, using the first-in, first-out method. 2. Determine the total sales and the total cost of goods sold for the period. Journalize the entries in the sales and cost of goods sold accounts. Assume that all sales were on account and date your journal entry March 31. Refer to the Chart of Accounts for exact wording of account titles. 3. Determine the gross profit from sales for the period. 4. Determine the ending inventory cost as of March 31. 5. Based upon the preceding data, would you expect the ending inventory using the last-in, first-out method to be higher or lower? Chart of Accounts CHART OF ACCOUNTS Midnight Supplies General Ledger ASSETS 110 Cash 111 Petty Cash 120 Accounts Receivable 131 Notes Receivable 132 Interest Receivable 141 Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 181 Land 191 Office Equipment REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Goods Sold 515 Credit Card Expense 516 Cash Short and Over 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Insurance Expense Instructions Chart of Accounts FIFO Journal Final Questions Chart of Accounts 192 Accumulated Depreciation-Office Equipment 193 Store Equipment 194 Accumulated Depreciation-Store Equipment LIABILITIES 210 Accounts Payable 221 Notes Payable 222 Interest Payable 231 Salaries Payable 241 Sales Tax Payable 534 Office Supplies Expense 535 Rent Expense 536 Repairs Expense 537 Selling Expenses 538 Store Supplies Expense 561 Depreciation Expense-Office Equipment 562 Depreciation Expense-Store Equipment 590 Miscellaneous Expense 710 Interest Expense EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends FIFO 1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in Exhibit 3, using the first-in, first-out method. Under FIFO, if units are in inventory at two different costs, en first in the Cost of Goods Sold Unit Cost column and in the Inventory Unit Cost column. Date Date Quantity Jan. 1 10 10 28 30 Feb. 5 10 10 16 16 $ $ Purchases Unit Cost $ Cost of Goods Sold Total Cost Quantity Unit Cost Total Cost Quantity $ $ $ $ $ $ $ $ $ $ $ $ $ Inventory Unit Cost FIFO Feb. 5 10 10 16 16 28 Mar. 5 5 14 25 25 * * 8 8 Balances $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ FIFO Quantity Cost of Goods Sold Unit Cost $ $ $ $ $ Total Cost Quantity $ Inventory Unit Cost Total Cost $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ FIFO $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Final Questions 3. Determine the gross profit from sales for the period. 4. Determine the ending inventory cost as of March 31. 5. Based upon the preceding data, would you expect the ending inventory using the last-in, first-out method to be higher or lower? Higher Lower