The beginning inventory at Funky Party Supplies and data on purchases and sales for a three-month period ending March 31, 2016, are as follows:

Instructions
1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 5, using the last-in, first-out method.
2. Determine the total sales, the total cost of merchandise sold, and the gross profit from sales for the period.
3. Determine the ending inventory cost as of March 31, 2016.
Exhibit 5: Direct Write-Off and Allowance Methods

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Number of Units Per Unit 2,500 $60.00 $150,000 7,500 68.00 510,000 3,750 120.00 450,000 250 120.00 150,000 Total Date Transaction Jan. 1 Inventory 10 Purchase 28 Sale 30 Sale Date Feb. 5 Sale 500 120.00 60,000 125.00 1,25,000 71.60 1,074,000 Mar. 5 Purchase 10,000 25.00 1,250,000 ase 125.00 1,093,750 Direct Write-Off Method Allowance Method Bad debt expense When the specific customer Using estimate based on is recorded accounts are determined to be uncollectible. (1) a percent of sales or (2) an analysis of receivables. Allowance account Primary users No allowance account is used. Small companies and companies The allowance account is used. Large companies and those with a with few receivables. large amount of receivables.