FIFO perpetual inventory Instructions FIFO Chart of Accounts 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: Per Unit Total Date Jan. Transaction 1 Inventory Number of Units 7,500 $75.00 $562,500 1,912,500 10 Purchase 22,500 85.00 28 Sale 11,250 150.00 1,687,500 30 Sale 3.750 150.00 Feb 5 Sale 1,500 150.00 10 Purchase 87.50 16 Sale 54,000 27,000 25,500 160.00 562,500 225,000 4.725,000 4,320,000 4,080,000 4,027,500 4,800.000 675,000 28 Sale 160.00 Mar. 5 Purchase 45,000 89.50 14 Sale 160.00 30,000 7,500 25 Purchase 90.00 30 Sale 26,250 160.00 4,200,000 Instructions 1. Record the inventory, purchases, and cost of merchandise 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 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 March 31. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered 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 inventory using the last-in, first-out method to be higher or lower? FIFO 1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one ilustrated in Exhibit 3. using the first-in, first-out method. Date Purchases Cost of Merchandise Sold Inventory Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Jan. 1 10 10 28 28 30 Feb. 5 10 10 16 16 28 Mar. 5 14 14 25 25 30 30 31 Balances x Chart of Accounts Midnight Supplies General Ledger ASSETS REVENUE 410 Sales 610 Interest Revenue 110 Cash 111 Petty Cash 120 Accounts Receivable 131 Notes Receivable 132 Interest Receivable 141 Merchandise Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 181 Land 191 Office Equipment 192 Accumulated Depreciation Office Equipment 193 Store Equipment 194 Accumulated Depreciation Store Equipment EXPENSES 510 Cost of Merchandise Sold 515 Credit Card Expense 516 Cash Short and Over 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Insurance Expense 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 LIABILITIES 210 Accounts Payable 221 Notes Payable 222 Interest Payable 231 Salaries Payable 241 Sales Tax Payable EQUITY 310 Owner, Capital 311 Owner, Drawing 312 Income Summary 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 March 31. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debitor credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 3 4 4 Final Questions 3. Determine the gross profit from sales for the period. EA 4. Determine the ending inventory cost as of March 31. EA 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