The beginning inventory at Midnight Supplies and data on purchases and sales for a three month...
The beginning inventory at Midnight Supplies and data on purchases and sales for a three month period ending March 31 are as follows:
|
Date |
Transaction |
Number of Units |
Per Unit |
Total |
|
| Jan. | 1 | Inventory | 2,600 | $54.00 | $140,400 |
| 10 | Purchase | 7,000 | 62.00 | 434,000 | |
| 28 | Sale | 3,850 | 108.00 | 415,800 | |
| 30 | Sale | 1,300 | 108.00 | 140,400 | |
| Feb. | 5 | Sale | 500 | 108.00 | 54,000 |
| 10 | Purchase | 17,500 | 64.00 | 1,120,000 | |
| 16 | Sale | 8,700 | 113.00 | 983,100 | |
| 28 | Sale | 8,600 | 113.00 | 971,800 | |
| Mar. | 5 | Purchase | 14,000 | 65.60 | 918,400 |
| 14 | Sale | 10,100 | 113.00 | 1,141,300 | |
| 25 | Purchase | 3,300 | 66.00 | 217,800 | |
| 30 | Sale | 7,750 | 113.00 | 875,750 | |
| 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 all sales were on account and date your journal entry March 31. Refer to the Chart of Accounts for exact wording of account titles. |
| 3. | Determine the gross profit from sales for the period. |
| 4. | Determine the ending inventory cost as of March 31. |
| 5. | Based upon the preceding data, would you expect the ending inventory using the last-in, first-out method to be higher or lower? |
Homework Answers
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| Midnight Supplies | Answer 1 | Perpetual FIFO | |||||||
| Date | Cost of Goods available for sale | Cost of Goods sold | Inventory Balance | ||||||
| No. of Units | Cost per unit | Amount | No. of Units | Cost per unit | Cost of Goods sold | No. of Units | Cost per unit | Inventory Balance | |
| 1-Jan | 2,600.00 | 54.00 | 140,400.00 | 2,600.00 | 54.00 | 140,400.00 | |||
| 10-Jan | 7,000.00 | 62.00 | 434,000.00 | 7,000.00 | 62.00 | 434,000.00 | |||
| 28-Jan | 2,600.00 | 54.00 | 140,400.00 | 5,750.00 | 62.00 | 356,500.00 | |||
| 1,250.00 | 62.00 | 77,500.00 | |||||||
| 30-Jan | 1,300.00 | 62.00 | 80,600.00 | 4,450.00 | 62.00 | 275,900.00 | |||
| 5-Feb | 500.00 | 62.00 | 31,000.00 | 3,950.00 | 62.00 | 244,900.00 | |||
| 10-Feb | 17,500.00 | 64.00 | 1,120,000.00 | 3,950.00 | 62.00 | 244,900.00 | |||
| 17,500.00 | 64.00 | 1,120,000.00 | |||||||
| 16-Feb | 3,950.00 | 62.00 | 244,900.00 | 12,750.00 | 64.00 | 816,000.00 | |||
| 4,750.00 | 64.00 | 304,000.00 | |||||||
| 28-Feb | 8,600.00 | 64.00 | 550,400.00 | 4,150.00 | 64.00 | 265,600.00 | |||
| 5-Mar | 14,000.00 | 65.60 | 918,400.00 | 4,150.00 | 64.00 | 265,600.00 | |||
| 14,000.00 | 65.60 | 918,400.00 | |||||||
| 14-Mar | 4,150.00 | 64.00 | 265,600.00 | 8,050.00 | 65.60 | 528,080.00 | |||
| 5,950.00 | 65.60 | 390,320.00 | |||||||
| 25-Mar | 3,300.00 | 66.00 | 217,800.00 | 8,050.00 | 65.60 | 528,080.00 | |||
| 3,300.00 | 66.00 | 217,800.00 | |||||||
| 30-Mar |
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Weighted Average Cost Method with Perpetual Inventory The beginning inventory for Midnight Supplies and data on purchases and sales for a three-month period are as follows: Date Transaction Total Number of Units 7,400 22,200 Jan. 1 Inventory $532,800 Per Unit $72.00 82.00 144.00 1,820,400 10 28 Purchase Sale 11,100 1,598,400 3,700 144.00 532,800 30 Feb. 5 Sale Sale 1,480 144.00 213,120 10 Purchase 53,280 84.50 16 28 Sale Sale Mar. 5 Purchase 26,640 25,160 44,400 29,600 7,400 25,900 154.00 154.00...