Question

include FIFO and Journal

FIFO perpetual Inventory Instructions Chart of Accounts FIFO Journal Final Questions 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 Number of Units 2,500 7,600 Jan Total $160,000 1 10 28 30 5 Transaction Inventory Purchase Sale Sale Sale Per Unit $64.00 72.00 128.00 128.00 128.00 3,700 1,400 500 18,500 Purchase Sale 16 8,000 547,200 473,600 179,200 64,000 1,369,000 1,183,700 1,130,507 1,134,000 1,330,000 250,800 1,017,450 28 Sale 8.500 15.000 5 133.00 133.00 75.60 133.00 76.00 133.00 Purchase 14 25 30 Sale Purchase Sale 10,000 3.300 7,650 Instructions 1. Record the inventory, purchases, and cost of goods 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 goods sold for the period. Journalize the entries in the sales and cost of goods sold accounts. Assume that is w on mount and date your ournal entry March 31. Refer to the Chart of Armunts for exact wording of mounties Check My Work 4 more Check My Woderemaining

Answer 1

Ans. 1	MIDNIGHT SUPPLIES
	Schedule of Cost of Merchandise Sold
	FIFO Method
	For the three - months ended March 31
	Purchase				Cost of merchandise sold			Balance
	Date	Quantity	Unit cost	Total cost	Quantity	Unit cost	Total cost	Quantity	Unit cost	Total cost
	01-Jan	2500	$64.00	$160,000				2500	$64.00	$160,000
	10-Jan	7600	$72.00	$547,200				2500	$64.00	$160,000
								7600	$72.00	$547,200
	28-Jan				2500	$64.00	$160,000
					1200	$72.00	$86,400	6400	$72.00	$460,800
	30-Jan				1400	$72.00	$100,800	5000	$72.00	$360,000
	05-Feb				500	$72.00	$36,000	4500	$72.00	$324,000
	10-Feb	18500	$74.00	$1,369,000				4500	$72.00	$324,000
								18500	$74.00	$1,369,000
	16-Feb				4500	$72.00	$324,000
					4400	$74.00	$325,600	14100	$74.00	$1,043,400
	28-Feb				8500	$74.00	$629,000	5600	$74.00	$414,400
	05-Mar	15000	$75.60	$1,134,000				5600	$74.00	$414,400
								15000	$75.60	$1,134,000
	14-Mar				5600	$74.00	$414,400
					4400	$75.60	$332,640	10600	$75.60	$801,360
	25-Mar	3300	$76.00	$250,800				10600	$75.60	$801,360
								3300	$76.00	$250,800
	30-Mar				7650	$75.60	$578,340	2950	$75.60	$223,020
								3300	$76.00	$250,800
	Total				Cost of goods sold		$2,987,180	Ending inventory		$473,820
	*In FIFO method the units that have purchased first, are released the first one and the ending inventory
	units remain from the last purchases.

Ans. 2 Credit Debit $5,378,450 General Journal Accounts receivable Sales (Total sales recorded) $5,378,450 $2,987,180 Cost of merchandise sold Merchandise inventory (Total cost of merchandise sold) $2,987,180 Cost *Calculation of sales: Date Units 28-Jan 3700 30-Jan 1400 05-Feb 500 16-Feb 8900 28-Feb 8500 14-Mar 10000 30-Mar 7650 Total sales Rate $128.00 $128.00 $128.00 $133.00 $133.00 $133.00 $133.00 $473,600 $179,200 $64,000 $1,183,700 $1,130,500 $1,330,000 $1,017,450 $5,378,450 Ans. 3 Sales Less: Cost of goods sold Gross profit $5,378,450 -$2,987,180 $2,391,270 Ans. 4 Ending inventory $473,820

Ans. The inventory would be lower while using the last in first out method. This is so because inventory remains from first starting) purchases in Last in first out method and the unit cost of starting purchases are lower so the cost of inventory will be calculated on lower unit costs.