"FIFO perpetual inventory

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 per Total

Of units unit

Jan.1 Inventory 7,500 75.00 562,500

10 Purchase 22,500 85.00 1,912,500

28 Sale 11,250 150.00 1,687,500

30 Sale 3,750 150.00 562,500

Feb.5 Sale 1,500 150.00 225,000

10 Purchase 54,000 87.50 4,725,000

16 Sale 27,000 160.00 4,320,000

28 Sale 25,500 160.00 4,080,000

Mar.5 Purchase 45,000 89.50 4,027,500

14 Sale 30,000 160.00 4,800,000

25 Purchase 7,500 90.00 675,000

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. Journal-ize the entries in the sales and cost of merchandise sold accounts. Assume that all sales were on account.

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?"