LIFO Perpetual Inventory The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period ending March 31 are as follows: Number of Units Date Transaction Per Unit Total Jan. 1 Inventory 7.500 $75.00 $562,500 10 Purchase 22,500 85.00 1,912,500 28 Sale 11,250 150.00 1.687,500 Sale 3,750 150.00 562,500 Feb. 5 Sale 1,500 150.00 225.000 10 Purchase 54,000 87.50 4,725,000 16 Sale 27,000 160.00 4,320,000 28 Sale 25,500 160.00 4,080,000 Mar 5 Purchase 45,000 89.50 4,027,500 14 Sale 30,000 160.00 4,800,000 25 Purchase 7.500 90.00 675,000 30 Sale 26,250 160.00 4,200,000 Required: 1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4, using the last-n, first-out method under Liro, irunits are in inventory at two different costs, enter the units with the HIGHER unit cost first in the cast of Goods Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column Round unit cost to two decimal places, if necessary, Midnight Supplies Schedule of cost of Goods Sold LIFO Method For the Three Months Ended March 31 Purchases Cost of Goods Sold Inventory Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Jan 1 Jan 10 22,500 OS 1,912,500 Mar 25 7,500 90 675,000 Mar. 30 Mar 31 Balances 2. Determine the total sales, the total cost of goods sold, and the gross profit from sales for the period, Total sales Total cost of goods sold Gross profit 3. Determine the ending inventory cost as of March 31. Feedback Check My Work 1. When the perpetual inventory system is used, revenue is recorded each time a sale is made along with an entry to record the cost of the merchandise sold. LIFO means the last units purchased are assume sale, the remaining or ending inventory is made up of the first or earliest purchases. Think of your inventory in terms of "layers. The first sale comes from the most recent purchase layer. When deciding whic "Is there enough inventory left in the most recent purchase to cover the sale?" If not, the other units sold should be taken from the second most recent purchase layer, which then contains themost recent ce you have done this problem correctly, the remaining units malong up ending inventory will be costed at the January 1 beginning inventory and January 10 unit purchase price 2. Total sales are obtained by taking the number of units sold times their sale prices for all sales and adding these amounts together. The total cost of goods sold can be obtained by adding the LIFO costs in goods sold equals gross profit. 3. The ending inventory is what is left after subtracting the cost of goods sold from the goods available for sale. Multiply the units remaining after the last sale by their corresponding earliest layer cost to dete Learning Objective 2, Leaming Objective 3