Prairie Hardware operates a store in Red Deer, Alberta. The company began 2014 with an inventory of 50 snow blowers that cost $8,000 in total. During the year, the company purchased merchandise on account as follows:

March (60 units at $170) ...............................$ 10,200

August (40 units at $174) ............................... 6,960

October (180 units at $180) ............................. 32,400

Total purchases............................................ $ 49,560

Cash payments on account during the year totalled $44,000.

During November 2014, the company sold 300 units of merchandise for $85,000, of which $52,000 was for cash and the balance was on account. Prairie uses the FIFO method for inventories.

Required

1. Make summary journal entries to record the company's transactions for the year ended December 31, 2014. The company uses a perpetual inventory system.

2. Determine the FIFO cost of the company's ending inventory at December 31, 2014. Use a T-account.

3. Calculate Prairie Hardware's gross margin for the year ended December 31, 2014.