FIFO Perpetual Inventory

The beginning inventory of merchandise 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	36		$375		$13,500
8		Purchase	72		450		32,400
11		Sale	48		1,250		60,000
30		Sale	30		1,250		37,500
May 8		Purchase	60		500		30,000
10		Sale	36		1,250		45,000
19		Sale	18		1,250		22,500
28		Purchase	60		550		33,000
June 5		Sale	36		1,315		47,340
16		Sale	48		1,315		63,120
21		Purchase	108		600		64,800
28		Sale	54		1,315		71,010

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 Merchandise Sold Unit Cost column and in the Inventory Unit Cost column.

Dunne Co. Schedule of Cost of Merchandise Sold FIFO Method For the three-months ended June 30
	Purchases			Cost of Merchandise Sold			Inventory
Date	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total 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					$			$

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.

Record sale
Record cost

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 inventory using the last-in, first-out method to be higher or lower?