First Question----------------------------------------------------------------------------------------------------------------------------------------------

Periodic Inventory by Three Methods Dymac Appliances uses the periodic inventory system. Details regarding the inventory of appliances at January 1, purchases invoices during the next 12 months, and the inventory count at December 31 are summarized as follows: Purchases Invoices Inventory, Inventory Count, Model 1st 2nd 3rd January 1 December 31 A10 4 at $ 39 4 at $ 42 4 at $ 45 B15 3 at $ 87 4 at 78 3 at 84 12 9 91 E60 3 at 74 3 at 64 ne CT 67 9 at 69 G83 7 at 211 6 at 219 52 229 228 134 12 at 74 10 at 76 18 9T 83 12 91 84 13 5 M90 2 at 114 2 at 116 134 3 at 136 CO 070 5 at 152 4 at 162 4 at 167 7 at 172 Required: 1. Determine the cost of the inventory on December 31 by the first-in, first-out method. If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the units PURCHASED MOST RECENTLY first. Dymac Appliances Cost of the Inventory-FIFO Method December 31 Model Quantity Unit Cost Total Cost A10 45 $ 180 A10 42 42 B15 91 546 B15 1 84 34 E60 69 345 G83 9 228 2,052 134 13 84 1,092 M90 3 136 408 M90 134 268 Q70 172 1,204 Q70 167 167 Total $ 6,3882. Determine the cost of the inventory on December 31 by the last-in, first-out method. If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the OLDEST units first. Dymac Appliances Cost of the Inventory-LIFO Method December 31 Model Quantity Unit Cost Total Cost A10 5 39 $ 156 A10 42 B15 87 609 E60 64 192 E60 74 128 G83 211 1,477 G83 219 438 134 LO 76 760 134 74 222 M90 114 228 M90 116 348 M90 134 670 Q70 152 608 Q70 162 648 Total 5,876 3. Determine the cost of the inventory on December 31 by the weighted average cost method. Dymac Appliances Cost of the Inventory-Weighted Average Method December 31 Model Quantity Unit Cost Total Cost A10 42 $ 210 | B15 84 588 E60 58 340 G83 224 1,016 134 13 81 1,053 M90 130 650 070 160 1,280 Total $ 6,127 4a. Which inventory method would be preferred for income tax purposes in periods of rising prices? LIFO method 4b. Which inventory method would be preferred for income tax purposes in periods of declining prices? FIFO methodThe 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 3.000 356.00 $168,000 10 Purchase 7,100 64.00 454 400 28 Sale 4.200 112.00 470 400 30 Sale 1,300 112.00 145,800 Feb. 5 Sale 500 112.00 56.000 10 Purchase 18 500 66.00 1,221,000 16 Sale 8.900 117.00 1,041,300 28 Sale B.200 117.00 959,400 Mar. 5 Purchase 14.500 67.80 980 200 14 Sale 10.000 117.00 1,170,000 25 Purchase 3.400 68.00 231.200 Sale 8,000 117.00 936.000 Instructions 1. Record the inventory, purchases, and cost of goods sold data in a perpetual Inventory record similar to the one Mustrated In Exhibit 3, using the West-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 good's 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? Chart of Accounts CHART OF ACCOUNTS Midnight Supplies General Ledger ASSETS REVENUE 110 Cash 410 Sales 111 Petty Cash 810 Interest Revenue 120 Accounts Receivable 131 Notes Receivable EXPENSES 132 Interest Receivable 510 Cost of Goods Sold 141 Inventory 515 Credit Card Expense 145 Office Supplies 516 Cash Short and Over 146 Store Supplies 520 Salaries Expense 151 Prepaid Insurance 531 Advertising Expense 181 Land 532 Delivery Expense 191 Office Equipment 533 Insurance Expense 192 Accumulated Depreciation-Office Equipment 534 Office Supplies Expense 193 Store Equipment 535 Rent Expense 194 Accumulated Depreciation-Store Equipment 536 Repairs Expense 537 Selling Expenses LIABILITIES 538 Store Supplies Expense 210 Accounts Payable 561 Depreciation Expense-Office Equipment 221 Notes Payable 562 Depreciation Expense-Store Equipment 222 Interest Payable 580 Miscelaneous Expense 231 Salaries Payable 710 Interest Expense 241 Sales Tax Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one Mustrated 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. Date Purchases Cost of Goods sold Inventory Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Jan. 1 31 Balances Journal 2. Determine the total sales and the total cost of goods sold for the period. Joumalize 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. PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES Final Questions 3. Determine the gross profit from sales for the period. 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 Higher Lower