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

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. 

3. Determine the gross profit from sales for the period.

4. Determine the ending inventory cost on June 30.

5. Based upon the preceding data, would you expect the ending inventory using the last-in, first out method to be higher or lower?

Transcribed Image Text:

Number of Units Per Unit Date Transaction Total 25 3 Inventory 8 Purchase Apr. 3 $1,200 $ 30,000 75 1,240 93,000 11 Sale 40 2,000 80,000 30 Sale 30 2,000 60,000 May 8 8 Purchase 60 1,260 75,600 10 Sale 50 2,000 100,000 19 Sale 20 2,000 40,000 28 Purchase 80 1,260 100,800