The beginning inventory at Midnight Supplies and data on purchases and sales for a three month period ending March 31 are as follows. Complete the instructions.   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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The beginning inventory at Midnight Supplies and data on purchases and sales for a three month period ending March 31 are as follows. Complete the instructions.

  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?
FIFO perpetual inventory
Instructions
Chart of Accounts
FIFO
Journal
Final Questions
FIFO
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. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Goods Sold Unit
Cost column and in the Inventory Unit Cost column.
Journal
Date
Purchases
Cost of Goods Sold
Inventory
Date
Quantity
Unit Cost
Total Cost
Quantity
Unit Cost
Total Cost
Quantity
Unit Cost
Total Cost
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
Jan. 1
$
$
and date your journal entry March 31. Refer to the Chart of Accounts for exact wording of account titles.
10
$
2$
$
$
10
$
$
PAGE 10
28
JOURNAL
28
$
$
$
ACCOUNTING FOUATION
30
$
$
$
$
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
ASSETS
LIABILITIES
EQUITY
1
Feb. 5
$
$
$
$
10
$
$
2
10
$
3
16
2$
4
16
$
2$
$
$
28
$
$
$
Mar. 5
2$
2$
$
$
$
$
14
$
2$
14
$
$
$
$
25
2$
2$
$
25
$
$
30
$
$
$
$
30
$
$
31
Balances
$
Final Questions
3. Determine the gross profit from sales for the period.
24
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?
O Lower
O Higher
%24
Transcribed Image Text:FIFO perpetual inventory Instructions Chart of Accounts FIFO Journal Final Questions FIFO 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. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Goods Sold Unit Cost column and in the Inventory Unit Cost column. Journal Date Purchases Cost of Goods Sold Inventory Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost 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 Jan. 1 $ $ and date your journal entry March 31. Refer to the Chart of Accounts for exact wording of account titles. 10 $ 2$ $ $ 10 $ $ PAGE 10 28 JOURNAL 28 $ $ $ ACCOUNTING FOUATION 30 $ $ $ $ DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Feb. 5 $ $ $ $ 10 $ $ 2 10 $ 3 16 2$ 4 16 $ 2$ $ $ 28 $ $ $ Mar. 5 2$ 2$ $ $ $ $ 14 $ 2$ 14 $ $ $ $ 25 2$ 2$ $ 25 $ $ 30 $ $ $ $ 30 $ $ 31 Balances $ Final Questions 3. Determine the gross profit from sales for the period. 24 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? O Lower O Higher %24
Instructions
Chart of Accounts
General Ledger
The beginning inventory at Midnight Supplies and data on purchases and sales for a three month period ending March 31 are as follows:
ASSETS
REVENUE
Date
Transaction Number of Units
Per Unit
Total
110 Cash
410 Sales
1 Inventory
$130,000
Jan.
2,500
$52.00
111 Petty Cash
610 Interest Revenue
10
Purchase
7,800
60.00
468,000
120 Accounts Receivable
28
Sale
3,750
104.00
390,000
131 Notes Receivable
EXPENSES
30
Sale
1,200
104.00
124,800
132 Interest Receivable
510 Cost of Goods Sold
Feb.
Sale
500
104.00
52,000
141 Inventory
515 Credit Card Expense
10
Purchase
17,500
62.00
1,085,000
145 Office Supplies
516 Cash Short and Over
16
Sale
8,600
109.00
937,400
146 Store Supplies
520 Salaries Expense
28
Sale
8,900
109.00
970,100
151 Prepaid Insurance
531 Advertising Expense
Mar.
5
Purchase
14,200
63.60
903,120
181 Land
532 Delivery Expense
14
Sale
10,200
109.00
1,111,800
191 Office Equipment
533 Insurance Expense
25
Purchase
3,400
64.00
217,600
192 Accumulated Depreciation-Office Equipment
534 Office Supplies Expense
30
Sale
7,900
109.00
861,100
193 Store Equipment
535 Rent Expense
194 Accumulated Depreciation-Store Equipment
536 Repairs Expense
Instructions
537 Selling Expenses
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
LIABILITIES
538 Store Supplies Expense
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.
210 Accounts Payable
561 Depreciation Expense-Office Equipment
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.
221 Notes Payable
562 Depreciation Expense-Store Equipment
3. Determine the gross profit from sales for the period.
222 Interest Payable
590 Miscellaneous Expense
4. Determine the ending inventory cost as of March 31.
231 Salaries Payable
710 Interest Expense
5. Based upon the preceding data, would you expect the ending inventory using the last-in, first-out method to be higher or lower?
241 Sales Tax Payable
Transcribed Image Text:Instructions Chart of Accounts General Ledger The beginning inventory at Midnight Supplies and data on purchases and sales for a three month period ending March 31 are as follows: ASSETS REVENUE Date Transaction Number of Units Per Unit Total 110 Cash 410 Sales 1 Inventory $130,000 Jan. 2,500 $52.00 111 Petty Cash 610 Interest Revenue 10 Purchase 7,800 60.00 468,000 120 Accounts Receivable 28 Sale 3,750 104.00 390,000 131 Notes Receivable EXPENSES 30 Sale 1,200 104.00 124,800 132 Interest Receivable 510 Cost of Goods Sold Feb. Sale 500 104.00 52,000 141 Inventory 515 Credit Card Expense 10 Purchase 17,500 62.00 1,085,000 145 Office Supplies 516 Cash Short and Over 16 Sale 8,600 109.00 937,400 146 Store Supplies 520 Salaries Expense 28 Sale 8,900 109.00 970,100 151 Prepaid Insurance 531 Advertising Expense Mar. 5 Purchase 14,200 63.60 903,120 181 Land 532 Delivery Expense 14 Sale 10,200 109.00 1,111,800 191 Office Equipment 533 Insurance Expense 25 Purchase 3,400 64.00 217,600 192 Accumulated Depreciation-Office Equipment 534 Office Supplies Expense 30 Sale 7,900 109.00 861,100 193 Store Equipment 535 Rent Expense 194 Accumulated Depreciation-Store Equipment 536 Repairs Expense Instructions 537 Selling Expenses 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 LIABILITIES 538 Store Supplies Expense 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. 210 Accounts Payable 561 Depreciation Expense-Office Equipment 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. 221 Notes Payable 562 Depreciation Expense-Store Equipment 3. Determine the gross profit from sales for the period. 222 Interest Payable 590 Miscellaneous Expense 4. Determine the ending inventory cost as of March 31. 231 Salaries Payable 710 Interest Expense 5. Based upon the preceding data, would you expect the ending inventory using the last-in, first-out method to be higher or lower? 241 Sales Tax Payable
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