Question

LIFO Perpetual Inventory

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	7,500		$75.00		$562,500
10		Purchase	22,500		85.00		1,912,500
28		Sale	11,250		150.00		1,687,500
30		Sale	3,750		150.00		562,500
Feb. 5		Sale	1,500		150.00		225,000
10		Purchase	54,000		87.50		4,725,000
16		Sale	27,000		160.00		4,320,000
28		Sale	25,500		160.00		4,080,000
Mar. 5		Purchase	45,000		89.50		4,027,500
14		Sale	30,000		160.00		4,800,000
25		Purchase	7,500		90.00		675,000
30		Sale	26,250		160.00		4,200,000

Required:

1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4, using the last-in, first-out method. Under LIFO, if units are in inventory at two different costs, enter the units with the HIGHER unit cost first in the Cost of Goods Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column. Round unit cost to two decimal places, if necessary.

Midnight Supplies Schedule of Cost of Goods Sold LIFO Method For the Three Months Ended March 31
	Purchases			Cost of Goods Sold			Inventory
Date	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
Jan. 1								$	$
Jan. 10		$	$
Jan. 28					$	$
Jan. 30
Feb. 5
Feb. 10
Feb. 16
Feb. 28
Mar. 5
Mar. 14
Mar. 25
Mar. 30
Mar. 31	Balances					$			$

2. Determine the total sales, the total cost of goods sold, and the gross profit from sales for the period.

Total sales	$
Total cost of goods sold	$
Gross profit	$

3. Determine the ending inventory cost as of March 31.
$

Please answer in exact places in order for me to know what I'm checking, if its answer in different table formats, areas etc it would be wrong

thanks

Answer 1

Concepts and reason

Assets: Assets are tangible or intangible, and they are owned and controlled to produce value and used by the company to produce positive economic value. The asset is generally classified into fixed assets, current assets, tangible assets, and intangible assets.

Current assets: Current assets are the assets that are used to finance the day to day activities of the entity. The current assets generally include cash, accounts receivable, inventory, marketable securities, and so on.

Inventory valuation: The process of determining the value of inventory is called inventory valuation.

Perpetual inventory system: Perpetual inventory system is a method of stock recording. Under this system, inventory record is updated with every issuance and receipt of the inventory. It is easy to know the cost of goods sold and ending inventory units under a perpetual system.

Fundamentals

Average cost method: It is the method of inventory valuation under which a uniform cost per unit is calculated by the average of all the purchases and then that rate is used to value the closing inventory.

Purchases: It refers to the buying of goods or services. The purchase can be made on credit as well as on the cash basis.

Net sales: Net sales are the amount of gross sales revenue less returns, allowances, and discounts. This is the main source of revenue for the company.

Cost of goods sold: The cost incurred by a business to sell products in a particular period is called the cost of goods sold. It is also known as the cost of sales. It is considered as the expense of the current period.

Ending inventory: Ending inventory unit is the units lying in the store due to its non-issuance in the current period. Ending inventory for the current period is the beginning inventory for the next period.

(1)

Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record:

Workings:

(2)

Determine the total sales, the total cost of goods sold, and the gross profit from sales for the period:

Thus, the total sales, the total cost of goods sold, and the gross profit from sales for the period are $19,875,000, $11,021,250, and $8,853,750, respectively.

(3)

Determine the ending inventory cost as of March 31:

The ending inventory cost as of March 31 has been determined as $881,250.

Ans: Part 1

Part 2

Part 3

The ending inventory cost as of March 31 has been determined as $881,250.