Question
The beginning inventory of merchandise at Dunne Co. and data on purchases and sales for a three-month period ending June 30, 2016, are as follows:
The beginning inventory of merchandise at Dunne Co. and data on purchases and sales for a three-month period ending June 30, 2016, are as follows:
Date | Transaction | Number of Units | Per Unit | Total | |
---|---|---|---|---|---|
Apr. | 3 | Inventory | 25 | $1,200 | $30,000 |
8 | Purchase | 75 | 1,240 | 93,000 | |
11 | Sale | 40 | 2,000 | 80,000 | |
30 | Sale | 30 | 2,000 | 60,000 | |
May | 8 | Purchase | 60 | 1,260 | 75,600 |
10 | Sale | 50 | 2,000 | 100,000 | |
19 | Sale | 20 | 2,000 | 40,000 | |
28 | Purchase | 80 | 1,260 | 100,800 | |
June | 5 | Sale | 40 | 2,250 | 90,000 |
16 | Sale | 25 | 2,250 | 56,250 | |
21 | Purchase | 35 | 1,264 | 44,240 | |
28 | Sale | 44 | 2,250 | 99,000 |
Instructions | |
1. | Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4 , using the first-in, first-out method. |
2. | Determine the total sales and the total cost of merchandise sold for the period. Journalize the entries in the sales and cost of merchandise sold accounts. Assume that all sales were on account, and date your journal entry June 30. 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 on June 30, 2016. |
5. | Based upon the preceding data, would you expect the inventory using the last-in, first-out method The method of inventory costing based on the assumption that the cost of merchandise sold is the cost of the most recent purchases. to be higher or lower? |
none
X
FIFO
1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in
Exhibit 4
, using the first-in, first-out method.
Date | Purchases | Cost of Merchandise Sold | Inventory | ||||||
2016 | Quantity | Unit Cost | Total Cost | Quantity | Unit Cost | Total Cost | Quantity | Unit Cost | Total Cost |
Apr. 3 | |||||||||
8 | |||||||||
8 | |||||||||
11 | |||||||||
11 | |||||||||
30 | |||||||||
May 8 | |||||||||
8 | |||||||||
10 | |||||||||
10 | |||||||||
19 | |||||||||
28 | |||||||||
28 | |||||||||
Jun. 5 | |||||||||
5 | |||||||||
16 | |||||||||
21 | |||||||||
21 | |||||||||
28 | |||||||||
28 | |||||||||
30 | Balances |
Points:
Feedback
Check My Work
none
X
Chart of Accounts
CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dunne Co. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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none
X
Journal
2. Determine the total sales and the total cost of merchandise sold for the period. Journalize the entries in the sales and cost of merchandise sold accounts. Assume that all sales were on account, and date your journal entry June 30. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 1
JOURNAL
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | |
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1 |
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2 |
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Solution
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | |
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1 |
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3 |
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4 |
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Points:
Feedback
Check My Work
none
X
Final Questions
3. Determine the gross profit from sales for the period.
Points:
Feedback
Check My Work
Explanation
4. Determine the ending inventory cost on June 30, 2016.
Points:
Feedback
Check My Work
Explanation
5. Based upon the preceding data, would you expect the inventory using the last-in, first-out method
The method of inventory costing based on the assumption that the cost of merchandise sold is the cost of the most recent purchases.
to be higher or lower?
Higher
Lower
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