Periodic Inventory by Three Methods The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are as follows: Date Transaction Number of Units Per Unit Total Apr. 3 Inventory 25 $1,200 $30,000 8 Purchase 75 1,240 93,000 11 Sale 40 2,000 80,000 30 Sale 30 2,000 60,000 May 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 June 5 Sale 40 2,250 90,000 16 Sale 25 2,250 56,250 21 Purchase 35 1,264 44,240 28 Sale 44 2,250 99,000 Required: 1. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system. Inventory, June 30 $fill in the blank 1 Cost of goods sold $fill in the blank 2 2. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system. Inventory, June 30 $fill in the blank 3 Cost of goods sold $fill in the blank 4 3. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system. Note: Round the weighted average unit cost to the nearest dollar and final answers to the nearest dollar. Inventory, June 30 $fill in the blank 5 Cost of goods sold $fill in the blank 6 4. Compare the gross profit and June 30 inventories using the following column headings. For those boxes in which you must enter subtracted or negative numbers use a minus sign. FIFO LIFO Weighted Average Sales $fill in the blank 7 $fill in the blank 8 $fill in the blank 9 Cost of goods sold fill in the blank 10 fill in the blank 11 fill in the blank 12 Gross profit $fill in the blank 13 $fill in the blank 14 $fill in the blank 15 Inventory, June 30 $fill in the blank 16 $fill in the blank 17 $fill in the blank 18 Feedback Area Feedback 1. Note that the periodic inventory system is used in this problem. FIFO means that the first units purchased are assumed to be the first to be sold. Therefore, ending inventory costs for the period are calculated by taking the number of items remaining in the physical inventory times the most recent purchase price. If the number of items in last purchase layer is less than the number in ending inventory, the balance of the ending inventory items must be recorded at the second most recent purchase cost. The cost of goods sold for the period can be calculated by subtracting the ending inventory from the total cost of goods available for sale. 2. Note that the periodic inventory system is used in this problem. LIFO means the last units purchased are assumed to be the first to be sold. Therefore the ending inventory for the period is made up of the earliest costs from the period (the beginning inventory). If the number of units in the ending inventory is greater than the units in the beginning inventory, the excess units will be recorded at the next oldest cost associated with the first purchase. The cost of goods sold for the period can be calculated by subtracting the ending inventory from the total cost of goods available for sale. 3. Note that the periodic inventory system is used in this problem. The weighted average cost means the average cost of all available units purchased is applied to the number of units sold and those in ending inventory. Therefore, you must first obtain a unit cost by dividing the total cost of all units available for sale by the number of units available for sale. Then multiply the number of items remaining in the physical inventory times this unit cost. The cost of goods sold for the period can be calculated by subtracting the ending inventory from the total cost of goods available for sale. 4. Recall that FIFO reports higher gross profit, net income, and inventory than the LIFO method when costs (prices) are increasing. The weighted average reports gross profit, net income, and inventory between that of FIFO and LIFO.