The beginning inventory at Funky Party Supplies and data on purchases and sales for a three-month period ending March 31, 2016, are as follows:

Date		Transaction	Number of Units	Per Unit	Total
Jan.	1	Inventory	2,600	54.00	140,400
	10	Purchase	7,000	62.00	434,000
	28	Sale	3,850	108.00	415,800
	30	Sale	1,300	108.00	140,400
Feb.	5	Sale	500	108.00	54,000
	10	Purchase	17,500	64.00	1,120,000
	16	Sale	8,700	113.00	983,100
	28	Sale	8,600	113.00	971,800
Mar.	5	Purchase	14,000	65.60	918,400
	14	Sale	10,100	113.00	1,141,300
	25	Purchase	2,300	66.00	151,800
	30	Sale	8,750	113.00	988,750

Instructions

1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4 , using the first-in, first-out method.

Date	Purchases			Cost of Merchandise Sold			Inventory
2016	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
Jan. 1
10
10
28
28
30
Feb. 5
10
10
16
16
28
Mar. 5
5
14
14
25
25
30
30
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 and date your journal entry March 31. Refer to the Chart of Accounts for exact wording of account titles.

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4

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

4.	Determine the ending inventory cost as of March 31, 2016.

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

PART II

The beginning inventory of merchandise at Keats Office Supplies and data on purchases and sales for a three-month period are as follows:

Date		Transaction	Number of Units		Per Unit		Total
March 3		Inventory	36		$525		$18,900
8		Purchase	72		630		45,360
11		Sale	48		1,750		84,000
30		Sale	30		1,750		52,500
April 8		Purchase	60		700		42,000
10		Sale	36		1,750		63,000
19		Sale	18		1,750		31,500
28		Purchase	60		770		46,200
May 5		Sale	36		1,840		66,240
16		Sale	48		1,840		88,320
21		Purchase	108		840		90,720
28		Sale	54		1,840		99,360

Required:

1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4, using the last-in, first-out method. Under LIFO, if units are in inventory at two different costs, enter the units with the HIGHER unit cost first in the Cost of Merchandise Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column.

Keats Office Supplies Schedule of Cost of Merchandise Sold LIFO Method For the three months ended May 31, 2016
	Purchases			Cost of Merchandise Sold			Inventory
Date	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
Mar. 3								$	$
Mar. 8		$	$
Mar. 11					$	$
Mar. 30
Apr. 8
Apr. 10
Apr. 19
Apr. 28
May 5
May 16
May 21
May 28
May 31	Balances					$			$

2. Determine the total sales, the total cost of merchandise sold, and the gross profit from sales for the period.

Total sales	$
Total cost of merchandise sold	$
Gross profit from sales	$

3. Determine the ending inventory cost as of May 31, 2016.