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, 2014, are as follows:

Date		Transaction	Number of Units		Per Unit		Total
March 1		Inventory	84		$225		$18,900
10		Purchase	168		270		45,360
28		Sale	112		750		84,000
30		Sale	70		750		52,500
April 5		Purchase	140		300		42,000
10		Sale	84		750		63,000
16		Sale	42		750		31,500
28		Purchase	140		330		46,200
May 5		Sale	84		790		66,360
14		Sale	112		790		88,480
25		Purchase	252		360		90,720
30		Sale	126		790		99,540

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. If units are in inventory at two different costs, enter the OLDEST units first.

Keats Office Supplies Schedule of Cost of Merchandise Sold FIFO Method For the three months ended May 31, 2014
	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	SelectAccounts ReceivableCashFees EarnedMerchandise InventorySalesItem 93
	SelectAccounts ReceivableCashFees EarnedMerchandise InventorySalesItem 95
Record cost	SelectAccounts ReceivableCashCost of Merchandise SoldSalesMerchandise InventoryItem 97
	SelectAccounts PayableAccounts ReceivableCashCost of Merchandise SoldMerchandise InventoryItem 99

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

4. Determine the ending inventory cost as of May 31, 2014. $

5. Based upon the preceding data, would you expect the inventory using the last-in, first-out method to be higher or lower? SelectHigherLowerItem 103