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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

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 2,500 $52.00 $130,000
10 Purchase 7,800 60.00 468,000
28 Sale 3,750 104.00 390,000
30 Sale 1,200 104.00 124,800
Feb. 5 Sale 500 104.00 52,000
10 Purchase 17,500 62.00 1,085,000
16 Sale 8,600 109.00 937,400
28 Sale 8,900 109.00 970,100
Mar. 5 Purchase 14,200 63.60 903,120
14 Sale 10,200 109.00 1,111,800
25 Purchase 2,400 64.00 153,600
30 Sale 8,900 109.00 970,100
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.
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.
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?

Needs to be in FIFO

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

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