FIFO Perpetual Inventory

The beginning inventory of merchandise at Rhodes 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	42		$300		$12,600
8		Purchase	84		360		30,240
11		Sale	56		1,000		56,000
30		Sale	35		1,000		35,000
May 8		Purchase	70		400		28,000
10		Sale	42		1,000		42,000
19		Sale	21		1,000		21,000
28		Purchase	70		440		30,800
June 5		Sale	42		1,050		44,100
16		Sale	56		1,050		58,800
21		Purchase	126		480		60,480
28		Sale	63		1,050		66,150

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.

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. If an amount box does not require an entry, leave it blank.

\begin{tabular}{|c|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{10}{|c|}{\begin{tabular}{l} Rhodes Co. \\ Schedule of Cost of Merchandise Sold \\ FIFO Method \\ For the three-months ended June 30 \end{tabular}} \\ \hline & \multicolumn{3}{|c|}{ Purchases } & \multicolumn{3}{|c|}{ Cost of Merchandise Sold } & \multicolumn{3}{|c|}{ Inventory } \\ \hline Date & Quantity & Unit Cost & Total Cost & Quantity & Unit Cost & Total Cost & Quantity & Unit Cost & Total Cost \\ \hline Apr. 3 & & & & & & & & $ & $ \\ \hline Apr. 8 & & $ & $ & & & & & & \\ \hline Apr. 11 & & & & & + & P & & & \\ \hline Apr. 30 & & & & & & & & & \\ \hline May 8 & & & & & & & & & \\ \hline May 10 & & & & & & & & & \\ \hline May 19 & & & & & & & & & \\ \hline May 28 & & & & & & & & & \\ \hline June 5 & & & & & & & & & \\ \hline \end{tabular} 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