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

Date	Transaction	Number of Units	Per Unit	Total
Jan.	1	Inventory	9,000	$60.00	$540,000
	10	Purchase	21,000	70.00	1,470,000
	28	Sale	10,250	140.00	1,435,000
	30	Sale	5,750	140.00	805,000
Feb.	5	Sale	3,500	140.00	490,000
	10	Purchase	39,500	75.00	2,962,500
	16	Sale	15,000	150.00	2,250,000
	28	Sale	10,000	150.00	1,500,000
Mar.	5	Purchase	25,000	82.00	2,050,000
	14	Sale	30,000	150.00	4,500,000
	25	Purchase	10,000	88.40	884,000
	30	Sale	19,000	150.00	2,850,000

	Required:
1.	Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated inExhibit 3, using the first-in, first-out method.
2.	Determine the total sales and the total cost of goods sold for the period. Journalize summary entries for the sales and corresponding cost of goods sold for the period. Assume that all sales were on account and date your journal entry March 31.
3.	Determine the gross profit from sales for the period.
4.	Determine the ending inventory cost as of March 31.
5.	Based upon the preceding data, would you expect the ending inventory using the last-in, first-out method to be higher or lower?

CHART OF ACCOUNTS

Midnight Supplies

General Ledger

	ASSETS
110	Cash
111	Petty Cash
120	Accounts Receivable
131	Notes Receivable
132	Interest Receivable
141	Inventory
145	Office Supplies
146	Store Supplies
151	Prepaid Insurance
181	Land
191	Office Equipment
192	Accumulated Depreciation-Office Equipment
193	Store Equipment
194	Accumulated Depreciation-Store Equipment

	LIABILITIES
210	Accounts Payable
221	Notes Payable
222	Interest Payable
231	Salaries Payable
241	Sales Tax Payable

	EQUITY
310	Common Stock
311	Retained Earnings
312	Dividends

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Goods Sold
515	Credit Card Expense
516	Cash Short and Over
520	Salaries Expense
531	Advertising Expense
532	Delivery Expense
533	Insurance Expense
534	Office Supplies Expense
535	Rent Expense
536	Repairs Expense
537	Selling Expenses
538	Store Supplies Expense
561	Depreciation Expense-Office Equipment
562	Depreciation Expense-Store Equipment
590	Miscellaneous Expense
710	Interest Expense

1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated inExhibit 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 Goods Sold Unit Cost column and in the Inventory Unit Cost column.

Date	Purchases	Cost of goods Sold	Inventory
Date	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 goods sold for the period. Journalize summary entries for the sales and corresponding cost of goods sold for the period. Assume that all sales were on account and date your journal entry March 31.

General Journal Instructions

PAGE 10

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY