The beginning inventory of merchandise at Keats Office Supplies and data on purchases and sales for a three-month period ending May 31, 2016, are as follows:

Date		Transaction	Number of Units		Per Unit		Total
March 1		Inventory	66		$600		$39,600
10		Purchase	132		720		95,040
28		Sale	88		2,000		176,000
30		Sale	55		2,000		110,000
April 5		Purchase	110		800		88,000
10		Sale	66		2,000		132,000
16		Sale	33		2,000		66,000
28		Purchase	110		880		96,800
May 5		Sale	66		2,100		138,600
14		Sale	88		2,100		184,800
25		Purchase	198		960		190,080
30		Sale	99		2,100		207,900

Required:

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. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Merchandise Sold Unit Cost column and in the Inventory Unit Cost column.

Keats Office Supplies Schedule of Cost of Merchandise Sold FIFO Method For the three months ended May 31, 2016
	Purchases			Cost of Merchandise Sold			Inventory
Date	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
Mar. 1								$	$
Mar. 10		$	$
Mar. 28					$	$
Mar. 30
Apr. 5
Apr. 10
Apr. 16
Apr. 28
May 5
May 14
May 25
May 30
May 31	Balances					$			$

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.

Record sale	Accounts Receivable
	Sales
Record cost	Cost of Merchandise Sold
	Merchandise Inventory

3. Determine the gross profit from sales for the period. $

4. Determine the ending inventory cost as of May 31, 2016. $

5. Based upon the preceding data, would you expect the inventory using the last-in, first-out method to be higher or lower?