The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period are shown in Problem 7-1A.
Instructions
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.
2. Determine the total sales, the total cost of merchandise sold, and the gross profit from sales for the period.
3. Determine the ending inventory cost as of March 31.
Answer:
1.
Unit Total Unit Total Unit Total
Quantity Cost Cost Quantity Cost Cost Quantity Cost Cost
Jan. 17,500 75.00 562,500
10 22,500 85.00 1,912,5007,500 75.00 562,500
22,500 85.00 1,912,500
2811,250 85.00 956,250 7,500 75.00 562,500
11,250 85.00 956,250
303,750 85.00 318,750 7,500 75.00 562,500
7,500 85.00 637,500
Feb. 51,500 85.00 127,500 7,500 75.00 562,500
6,000 85.00 510,000
10 54,000 87.50 4,725,0007,500 75.00 562,500
6,000 85.00 510,000
54,000 87.50 4,725,000
1627,000 87.50 2,362,500 7,500 75.00 562,500
6,000 85.00 510,000
27,000 87.50 2,362,500
2825,500 87.50 2,231,250 7,500 75.00 562,500
6,000 85.00 510,000
1,500 87.50 131,250
Mar. 5 45,000 89.50 4,027,5007,500 75.00 562,500
6,000 85.00 510,000
1,500 87.50 131,250
45,000 89.50 4,027,500
1430,000 89.50 2,685,000 7,500 75.00 562,500
6,000 85.00 510,000
1,500 87.50 131,250
15,000 89.50 1,342,500
25 7,500 90.00 675,0007,500 75.00 562,500
6,000 85.00 510,000
1,500 87.50 131,250
15,000 89.50 1,342,500
7,500 90.00 675,000
307,500 90.00 675,000 7,500 75.00 562,500
15,000 89.50 1,342,500 3,750 85.00 318,750
1,500 87.50 131,250
2,250 85.00 191,250
31 Balances11,021,250 881,250
2. Total sales.......................................................................................$19,875,000
Total cost of merchandise sold......................................................... 11,021,250
Gross profit.................................................................................... $ 8,853,750
* Total Sales = $19,875,000 = $1,687,500 + $562,500 + $225,000 + $4,320,000 + $4,080,000 +
$4,800,000 + $4,200,000
3. $881,250 = [(7,500 units × $75) + (3,750 units × $85)]
= $562,500 + $318,750