Question

FIFO Perpetual Inventory The beginning inventory at Dunne Co. and data on purchases and sales for a three-month period ending June 30 are as follows: Number Date Transaction of Units Per Unit Total Apr. 3 Inventory 78 $600 $46,800 Purchase 156 720 112,320 104 208,000 11 30 May 8 Sale Sale Purchase 65 130,000 130 2,000 2,000 800 2,000 2,000 104,000 10 Sale 78 156,000 39 78,000 130 880 114,400 19 28 June 5 16 21 Sale Purchase Sale Sale 78 163,800 104 218,400 2,100 2,100 960 2,100 Purchase 234 224,640 28 Sale 117 245,700 Required:
..................

Answer 1

Ans. 1	DUNNE   CO.
	Schedule of Cost of Merchandise Sold
	FIFO Method
	For the three - months ended June 30
	Purchase				Cost of merchandise sold			Balance
	Date	Quantity	Unit cost	Total cost	Quantity	Unit cost	Total cost	Quantity	Unit cost	Total cost
	3-Apr	78	$600.00	$46,800				78	$600.00	$46,800
	8-Apr	156	$720.00	$112,320				78	$600.00	$46,800
								156	$720.00	$112,320
	11-Apr				78	$600.00	$46,800
					26	$720.00	$18,720	130	$720.00	$93,600
	30-Apr				65	$720.00	$46,800	65	$720.00	$46,800
	8-May	130	$800.00	$104,000				65	$720.00	$46,800
								130	$800.00	$104,000
	10-May				65	$720.00	$46,800
					13	$800.00	$10,400	117	$800.00	$93,600
	19-May				39	$800.00	$31,200	78	$700.00	$54,600
	28-May	130	$880.00	$114,400				78	$700.00	$54,600
								130	$880.00	$114,400
	5-Jun				78	$700.00	$54,600	130	$880.00	$114,400
	16-Jun				104	$880.00	$91,520	26	$880.00	$22,880
	21-Jun	234	$960.00	$224,640				26	$880.00	$22,880
								234	$960.00	$224,640
	28-Jun				26	$880.00	$22,880
					91	$960.00	$87,360	143	$960.00	$137,280
	Total				Cost of goods sold		$457,080	Ending inventory		$137,280
	*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	General Journal		Debit	Credit
	Accounts receivable		$1,199,900
	Sales			$1,199,900
	(Total sales recorded)
	Cost of merchandise sold		$457,080
	Merchandise inventory			$457,080
	(Total cost of merchandise sold)

	*Calculation of sales:
	Date	Units	Rate	Cost
	11-Apr	104	$2,000.00	$208,000
	30-Apr	65	$2,000.00	$130,000
	10-May	78	$2,000.00	$156,000
	19-May	39	$2,000.00	$78,000
	5-Jun	78	$2,100.00	$163,800
	16-Jun	104	$2,100.00	$218,400
	28-Jun	117	$2,100.00	$245,700
	Total sales			$1,199,900
Ans. 3	Sales		$1,199,900
	Less: Cost of goods sold		$457,080
	Gross profit		$742,820
Ans. 4	Ending inventory		$137,280