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	Number of Units		Per Unit		Total
Apr. 3		Inventory	48		$150		$7,200
8		Purchase	96		180		17,280
11		Sale	64		500		32,000
30		Sale	40		500		20,000
May 8		Purchase	80		200		16,000
10		Sale	48		500		24,000
19		Sale	24		500		12,000
28		Purchase	80		220		17,600
June 5		Sale	48		525		25,200
16		Sale	64		525		33,600
21		Purchase	144		240		34,560
28		Sale	72		525		37,800

Required:

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. Under FIFO, 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.

Required:

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. Under FIFO, 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.

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.

RECORD SALE WORD KEY

• Accounts Receivable
• Cash
• Fees Earned
• Inventory
• Sales

RECORD COST WORD KEY

• accounts Receivable
• Cash
• Cost of Goods Sold
• Sales
• Inventory

3. Determine the gross profit from sales for the period. $

4. Determine the ending inventory cost as of June 30. $

5. Based upon the preceding data, would you expect the ending inventory using the last-in, first-out method to be higher or lower?

Dunne Co. Schedule of Cost of Goods Sold FIFO Method For the Three Months Ended June 30 Purchases Cost of Goods Sold Inventory Total Cost Quantity Total Cost Total Cost Date Quantity Unit Cost Unit Cost Quantity Unit Cost Apr. 3 Apr. 8 Apr. 11 Apr. 30 May 8 May 10 May 19 May 28 June 5 June 16 June 21 June 28 June 30 Balances |0 Record Accounts Receivable sale Record cost