The beginning inventory at Keats Office Supplies and data on purchases and sales for a three-month period are as follows:

Instructions 1. Based 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.3. Determine the gross profit from sales for the period.4. Determine the ending inventory cost.5. Based upon the preceding data, would you expect the inventory using the last-in, first-out method to be higher orlower?

Transcribed Image Text:

Number of Units 300 Per Transaction Total Date Unit Mar. 1 Inventory 10 Purchase $ 6.000 $20 500 10,500 21 35 28 Sale 14,000 400 30 Sale 250 40 10,000 Apr. 5 Sale 80 40 3.200 10 Purchase 450 22 9,900 Sale 42 16 250 10,500 28 Sale 6,750 150 45 May 5 Purchase Sale 24 175 4.200 160 8,000 14 50 25 Purchase 150 25 3,750 Sale 30 140 50 7.000