The beginning inventory for Midnight Supplies and data on purchases and sales for a three month period are as follows:

Date

Transaction

Number of Units

Per Unit

Total

Jan. 1 Inventory 7,500 $ 75.00 $ 562,500

10 Purchase 22,500 85.00 1,912,500

28 Sale 11,250 150.00 1,687,500

30 Sale 3,750 150.00 562,500

Feb. 5 Sale 1,500 150.00 225,000

10 Purchase 54,000 87.50 4,725,000

16 Sale 27,000 160.00 4,320,000

28 Sale 25,500 160.00 4,080,000

Mar. 5 Purchase 45,000 89.50 4,027,500

14 Sale 30,000 160.00 4,800,000

25 Purchase 7,500 90.00 675,000

30 Sale 26,250 160.00 4,200,000

Instructions

1. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system.

2. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system.

3. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system. Round the weighted average unit cost to the nearest cent and use that amount in subsequent computations.

4. Compare the gross profit and the March 31 inventories.