. Record the inventory, purchases, and cost of merchandise 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 merchandise sold for the period. Journalize the entries in the sales and cost of merchandise sold accounts. Assume that all sales were on account and date your journal entry March 31. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. 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 inventory using the last-in, first-out method to be higher or lower?
. Record the inventory, purchases, and cost of merchandise 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 merchandise sold for the period. Journalize the entries in the sales and cost of merchandise sold accounts. Assume that all sales were on account and date your journal entry March 31. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. 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 inventory using the last-in, first-out method to be higher or lower?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Topic Video
Question
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 | 2,700 | $50.00 | $135,000 |
| 10 | Purchase | 7,300 | 58.00 | 423,400 | |
| 28 | Sale | 4,050 | 100.00 | 405,000 | |
| 30 | Sale | 1,200 | 100.00 | 120,000 | |
| Feb. | 5 | Sale | 500 | 100.00 | 50,000 |
| 10 | Purchase | 17,000 | 60.00 | 1,020,000 | |
| 16 | Sale | 9,200 | 105.00 | 966,000 | |
| 28 | Sale | 8,000 | 105.00 | 840,000 | |
| Mar. | 5 | Purchase | 14,300 | 61.60 | 880,880 |
| 14 | Sale | 10,300 | 105.00 | 1,081,500 | |
| 25 | Purchase | 3,200 | 62.00 | 198,400 | |
| 30 | Sale | 8,000 | 105.00 | 840,000 | |
| Instructions | |
| 1. | Record the inventory, purchases, and cost of merchandise 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 merchandise sold for the period. Journalize the entries in the sales and cost of merchandise sold accounts. Assume that all sales were on account and date your |
| 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 inventory using the last-in, first-out method to be higher or lower? |
2. Determine the total sales and the total cost of merchandise sold for the period. Journalize the entries in the sales and cost of merchandise sold accounts. Assume that all sales were on account and date your journal entry March 31. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
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 inventory using the last-in, first-out method to be higher or lower?
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