FIFO Perpetual Inventory

The beginning inventory of merchandise at Keats Office Supplies and data on purchases and sales for a three-month period ending May 31, 2016, are as follows:

Date		Transaction	Number of Units		Per Unit		Total
March 1		Inventory	72		$450		$32,400
10		Purchase	144		540		77,760
28		Sale	96		1,500		144,000
30		Sale	60		1,500		90,000
April 5		Purchase	120		600		72,000
10		Sale	72		1,500		108,000
16		Sale	36		1,500		54,000
28		Purchase	120		660		79,200
May 5		Sale	72		1,575		113,400
14		Sale	96		1,575		151,200
25		Purchase	216		720		155,520
30		Sale	108		1,575		170,100

Required:

1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4, 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.

Keats Office Supplies Schedule of Cost of Merchandise Sold FIFO Method For the three months ended May 31, 2016
	Purchases			Cost of Merchandise Sold			Inventory
Date	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
Mar. 1								$	$
Mar. 10		$	$
Mar. 28					$	$
Mar. 30
Apr. 5
Apr. 10
Apr. 16
Apr. 28
May 5
May 14
May 25
May 30
May 31	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 May 31, 2016. $

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