Question

LIFO Perpetual Inventory

The beginning inventory of merchandise at Dunne Co. and data on purchases and sales for a three-month period ending June 30 are as follows:

Date		Transaction	Number of Units		Per Unit		Total
Apr. 3		Inventory	84		$525		$44,100
8		Purchase	168		630		105,840
11		Sale	113		1,750		197,750
30		Sale	71		1,750		124,250
May 8		Purchase	140		700		98,000
10		Sale	84		1,750		147,000
19		Sale	42		1,750		73,500
28		Purchase	140		770		107,800
June 5		Sale	84		1,840		154,560
16		Sale	112		1,840		206,080
21		Purchase	252		840		211,680
28		Sale	126		1,840		231,840

Required:

1. Record the inventory, purchases, and cost of merchandise 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 Merchandise Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column.

Dunne Co. Schedule of Cost of Merchandise Sold LIFO Method For the three-months ended June 30
	Purchases			Cost of Merchandise Sold			Inventory
Date	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
Apr. 3								$	$
Apr. 8		$	$
Apr. 11					$	$
Apr. 30
May 8
May 10
May 19
May 28
June 5
June 16
June 21
June 28
June 30	Balances					$			$

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

Total sales	$
Total cost of merchandise sold
Gross profit	$

3. Determine the ending inventory cost on June 30.

Answer 1

SOLUTION : 1
LIFO - PERPETUAL METHOD
		PURHASES			COST OF GOODS SOLD			ENDING INVENTORY
Date	Particulars	Units	Rate	Total	Units	Rate	Total	Units	Rate	Total
April , 03	Beginning inventory							84	$      525.00	$44,100
April , 08	Purchases	168	$           630.00	$1,05,840				84	$      525.00	$44,100
								168	$      630.00	$1,05,840
April, 11	Sales				113	$          630.00	$71,190	84	$      525.00	$44,100
								55	$      630.00	$34,650
Aprl, 20	Sales				55	$          630.00	$34,650
					16	$          525.00	$8,400	68	$      525.00	$35,700
May, 08	Purchases	140	$           700.00	$98,000				68	$      525.00	$35,700
								140	$      700.00	$98,000
May, 10	Sales				84	$          700.00	$58,800	68	$      525.00	$35,700
								56	$      700.00	$39,200
May, 19	Sales				42	$          700.00	$29,400	68	$      525.00	$35,700
								14	$      700.00	$9,800
May, 28	Purchase	140	$           770.00	$1,07,800				68	$      525.00	$35,700
								14	$      700.00	$9,800
								140	$      770.00	$1,07,800
June, 05	Sales				84	$          770.00	$64,680	68	$      525.00	$35,700
								14	$      700.00	$9,800
								56	$      770.00	$43,120
June, 16	Sales				56	$          770.00	$43,120
					14	$          700.00	$9,800
					42	$          525.00	$22,050	26	$      525.00	$13,650
June, 21	Purchases	252	$           840.00	$2,11,680				26	$      525.00	$13,650
								252	$      840.00	$2,11,680
June, 28	Sales				126	$          840.00	$1,05,840	26	$      525.00	$13,650
								126	$      840.00	$1,05,840
		700		$5,23,320	632		$4,47,930	152		$1,19,490
SOLUTION : 2		Unit	Rate	Amount
	Sales , April 03	113	1750	$1,97,750
	Sales , April 30	71	1750	$1,24,250
	Sales , May 10	84	1750	$1,47,000
	Sales , May 19	42	1750	$73,500
	Sales , June 05	84	1840	$1,54,560
	Sales , June 16	112	1840	$2,06,080
	Sales , June 28	126	1840	$2,31,840
		632		$11,34,980
	Less: Cost of Sales			$4,47,930
	Gross Profit			$6,87,050
SOLUTION : 3	Ending invetory	$1,19,490