Question
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
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 in Exhibit 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 ACCOUNTSMidnight SuppliesGeneral 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 |
. 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
Question not attempted.
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JOURNAL
ACCOUNTING EQUATION
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3. Determine the gross profit from sales for the period.
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