he 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	54		$600		$32,400
8		Purchase	108		720		77,760
11		Sale	72		2,000		144,000
30		Sale	45		2,000		90,000
May 8		Purchase	90		800		72,000
10		Sale	54		2,000		108,000
19		Sale	27		2,000		54,000
28		Purchase	90		880		79,200
June 5		Sale	54		2,100		113,400
16		Sale	72		2,100		151,200
21		Purchase	162		960		155,520
28		Sale	81		2,100		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 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.

1. 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							54	$ 600	$ 32,400
   Apr. 8	108	$ 720	$ 77,760				54	600	32,400
   							108	720	77,760
   Apr. 11				54	$ 600	$ 32,400	90	720	64,800
   				18	720	12,960
   Apr. 30				45	720	32,400	45	720	32,400
   May 8	90	800	72,000				45	720	32,400
   							90	800	72,000
   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	Accounts Receivable Cash Fees Earned Merchandise Inventory Sales
   	Accounts Receivable Cash Fees Earned Merchandise Inventory Sales
   Record cost	Accounts Receivable Cash Cost of Merchandise Sold Sales Merchandise Inventory
   	Accounts Payable Accounts Receivable Cash Cost of Merchandise Sold Merchandise Inventory

   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 A method of inventory costing based on the assumption that the most recent merchandise inventory costs should be charged against revenue.last-in, first-out method to be higher or lower?

   • Higher
   • Lower