x Instructions The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period ending March 31, are as follows: Date Total Transaction 1 Inventory Number of Units 2,500 8,000 Per Unit $70.00 Jan. 10 Purchase 78.00 $175,000 624,000 532,000 28 Sale 3,800 140.00 30 Sale 1,250 140.00 175,000 70,000 Feb. 5 Sale 500 140.00 10 Purchase 80.00 1,360,000 1,319,500 16 17,000 9,100 8,700 Sale 145.00 28 Sale 145.00 Mar. 5 Purchase 81.60 14,300 9,800 14 Sale 145.00 1,261,500 1,166,880 1,421,000 246,000 1,145,500 25 Purchase 3,000 82.00 30 Sale 7,900 145.00 Instructions 1. Record the inventory, purchases, and cost of merchandise 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 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 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 inventory using the last-in, first-out method to be higher or lower? FIFO 1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 3. using the first-in, first-out method. Date Purchases Cost of Merchandise Sold Inventory Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity 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 Inventory Quantity Unit Cost Total Cost 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 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 Final Questions 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 inventory using the last-in, first-out method to be higher or lower? Lower Higher