Inventory

Miller Corp. sells chairs. Miller reported the following information (all transactions are on account) for the quarter ending March 31, 2013:

Purchases Sales

Units Unit Cost Units Selling Price/Unit

Jan. 1 Beginning inventory 112 $72

13 Purchase 76 $71

29 Sale 121 $99

Feb. 3 Purchase 56 $69

16 Purchase 102 $65

Mar. 21 Sale 67 $98

Required:

In requirements 1-3, Miller uses a periodic inventory system.

1. Calculate the cost of ending inventory, cost of goods sold, gross profit, and gross profit percentage for the quarter ending March 31, 2013, assuming the FIFO inventory costing method is used.

2. Would Millers gross profit increase or decrease if it uses the weighted-average cost method instead of FIFO? You simply need to explain the direction of the change in gross profit. No calculations are required.

3. Miller reports its ending inventory at the Lower of Cost and Net Realizable Value (LCNRV); the net realizable value of chairs declined to $66 per unit on March 31, 2013. Prepare journal entries for March 31, 2013, assuming the FIFO inventory costing method is used. If no journal entry is required, indicate no entry required and briefly explain the reason.

In requirements 4, Miller uses a perpetual inventory system.

4. Prepare journal entries to record the sale on January 29, assuming the FIFO inventory costing method is used.