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: Number of Units Per Unit Total Date Apr. 3 8 11 30 Transaction Inventory Purchase Sale Sale $225 270 750 $10,800 25,920 48,000 30,000 24,000 36,000 May 8 Purchase 10 Sale 19 Sale 18,000 Purchase 26,400 37,920 28 June 5 16 21 28 Required: Sale Purchase Sale 50,560 51,840 56,880 1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrate 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 Dunne Co. Schedule of Cost of Goods Sold FIFO Method For the Three Months Ended June 30 Cost of Goods Sold Quantity Unit Cost Total Cost Purchases Unit Cost Date Quantity Total Cost Quant Apr. 3 Check My Work Bock Show Me How Calculator Print Item SUTUR CUSTUS FIFO Method For the Three Months Ended June 30 Cost of Goods Sold Quantity Unit Cost Total Cost Purchases Unit Cost Date Total Cost Quantity Inventory Unit Cost $ 225 Quantity 48 96 x Total Cost $ 10,800 Apr 3 x 25,920 270 270 Apr. 8 25,920 Apr 11 Accounting numeric field May 8 Deck My Work 3+ Show Me How Calculator Pritom une 30 Balances - Determine the total sales and the total cost of goods sold for the period. Journaline the entries in the sales and cost of goods sold accounts. Assume that all sales were on account. If an amount box does not requin try, leave it blank. Record sale Record cost Determine the gross profit from sales for the period. . Determine the ending inventory cost as of June 30. 5. Based upon the preceding data, would you expect the ending inventory using the last first-out method to be higher or lower? Oh My Wor 1. FIFO means that the first units purchased are assumed to be the first to be sold. Therefore, ending inventory made up of the most recent purchase. Think of your inventory in terms of "layers. The first sale comes from the oldest layer, which is beginning inventory When dedoing which layer to use for costing of the next sale ask yourself is the remaining amount of the beginning inventory layer enough to satisfy the second sale?" If not, the other units sold should be taken from the next purchase layer, which then contains the oldest costs. Continue this process for each transaction. If you have completed the problem corectly the remaining units making up ending inventory should be costed at the May 25 unit purchase price 2. Total sales are obtained by taking the number of units sold times their sale prices for all sales and adding these amounts together. The total cost of merchandise sold can be obtained by adding the FIFO costs in the perpetual investory record When the perpetual inventory system is used, revenue is recorded each time a sale is made along with an entry to record the cost of the merchandise sold. For this problem, however, prepare one your entry for the sale on account and one for the cost of merchandise sold 3. Sales minus cost of merchandise sold als gross profit
