The beginning inventory at RTE Office Supplies and data on purchases and sales for a three-month period ending August 31, 2014, 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 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 as of August 31, 2014.
5. Based upon the preceding data, would you expect the inventory using the last-in, first-out method to be higher orlower?

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Number Per of Units UTotal Date Transaction June Inventory 10 Purchase 28 Sale 30 Sale 500 $30.00 $15,000 1,500 34.0051,000 750 50.00 37,500 250 52.00 13,000 Numbe Per of Units Unit Date Transaction Total July 5 Sale 100 55.00 5,500 3,600 35.00 26,000 1,800 5600 100800 1,700 60.00 02000 3,000 35.80 107 400 2000 6000 120,000 36.00 1,750 60.00 105,000 10 Purchase 16 Sale 28 Sale Aug. 5 Purchase 14 Sale 25 Purchase 30 Sale 500 18,000