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 2,700 $50.00 $135,000 Purchase 58.00 10 7,300 423,400 28 Sale 4,050 100.00 405,000 120,000 30 Sale 1,200 100.00 Feb. 50,000 5 Sale 500 100.00 10 Purchase 17,000 60.00 1,020,000 16 Sale 9,200 105.00 966,000 28 Sale 8,000 105.00 840,000 61.60 14,300 880,880 Mar. 5 Purchase 14 Sale 10,300 105.00 1,081,500 25 Purchase 3,200 62.00 198,400 840,000 30 Sale 8,000 105.00 Instructions 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 1. 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. Based upon the preceding data, would you expect the ending inventory using the last-in, first-out method to be higher or lower? 5. Date Purchases Cost of Goods Sold Inventory Total Cost Unit Cost Unit Cost Quantity Date Quantity Total Cost Quantity Total Cost Unit 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 CHART OF ACCOUNTS Midnight Supplies General Ledger ASSETS REVENUE 110 Cash 410 Sales 111 Petty Cash 610 Interest Revenue 120 Accounts Receivable EXPENSES 131 Notes Receivable 510 Cost of Goods Sold 132 Interest Receivable 515 Credit Card Expense 141 Inventory 516 Cash Short and Over 145 Office Supplies 520 Salaries Expense 146 Store Supplies 531 Advertising Expense 151 Prepaid Insurance 532 Delivery Expense 181 Land 533 Insurance Expense 191 Office Equipment 534 Office Supplies Expense 192 Accumulated Depreciation-Office Equipment 535 Rent Expense 193 Store Equipment 536 Repairs Expense 194 Accumulated Depreciation-Store Equipment 537 Selling Expenses 520 Salaries Expense 146 Store Supplies 531 Advertising Expense 151 Prepaid Insurance 532 Delivery Expense 181 Land 533 Insurance Expense 191 Office Equipment 534 Office Supplies Expense 192 Accumulated Depreciation-Office Equipment 535 Rent Expense 193 Store Equipment 536 Repairs Expense 194 Accumulated Depreciation-Store Equipment 537 Selling Expenses LIABILITIES 538 Store Supplies Expense 210 Accounts Payable 561 Depreciation Expense-Office Equipment 221 Notes Payable 562 Depreciation Expense-Store Equipment 222 Interest Payable 590 Miscellaneous Expense 231 Salaries Payable 710 Interest Expense 241 Sales Tax Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 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 LIABILITIES DESCRIPTION POST. REF. DATE DEBIT CREDIT ASSETS EQUITY 1 2 3 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? Lower Higher