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 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 3,400 64.00 217,600 30 Sale 7,900 109.00 861,100 Instructions 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 the entries in the sales and cost of goods 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. 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 REVENUE 110 Cash 410 Sales 111 Petty Cash 610 Interest Revenue 120 Accounts Receivable 131 Notes Receivable EXPENSES 132 Interest Receivable 510 Cost of Goods Sold 141 Inventory 515 Credit Card Expense 145 Office Supplies 516 Cash Short and Over 146 Store Supplies 151 Prepaid Insurance 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 181 Land 533 Insurance Expense 191 Office Equipment 192 Accumulated Depreciation Office Equipment 193 Store Equipment 194 Accumulated Depreciation-Store Equipment LIABILITIES 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 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 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 othod. Under FIFO, if units are in inventory artwo different costs, enter the units with the LOWER unit cos Cost of Goods Sold Uni! Cos! columni and in the Inventory Unit Cost colum. 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 IS $ IS IS IS $ 10 $ 29 IS S S 28 $ $ $ $ 30 S IS S IS S $ $ $ $ Feb. 5 S S $ 10 S $ S 10 S $ 16 16 S S IS $ $ $ S 28 Mar. 5 $ $ $ $ $ IS S S IS $ 5 14 IS S S $ $ S 14 25 IS $ S IS $ $ $ 25 30 S $ S $ $ 30 IS 31 Balances $ $ $ $ 2. Determine the total sales and the total cost of goods sold for the period. Journalize the entries in the sales and cost of goods 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. PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 3 4 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? Higher Lower