PR 7-2A LIFO perpetual inventory

The beginning inventory at Keats Office 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.

Answer:

 Purchases Cost of Merchandise Sold Inventory  
Date  
Quantity 
Unit Cost 
Total Cost  
Quantity 
Unit Cost 
Total Cost  
Quantity 
Unit Cost 
Total Cost Mar. 1        300  20 6,000 10  500  21  10,500     300  500  20  21 6,000 10,500 28     400  21  8,400  300  100  20  21 6,000 2,100 30     100  150  21  20  2,100  3,000    150      20  3,000 Apr. 5     80  20  1,600  70  20 1,400 10  450  22  9,900     70  450  20  22 1,400 9,900 16     250  22  5,500  70  200  20  22 1,400 4,400 28     150  22  3,300  70  50  20  22 1,400 1,100
May 5  175  24  4,200    
 70  50  175 
 20  22  24 
1,400 1,100 4,200
 14     160  24  3,840  70  50  15 
 20  22  24 
1,400 1,100 360
 25  150  25  3,750    
 70  50  15  150 
 20  22  24  25 
1,400 1,100 360 3,750 Continued 

2. Total sales....................................................................... $59,450
Total cost of merchandise sold.....................................  31,240
Gross profit..................................................................... $28,210

3. $3,110 = [(70 units × $20) + (50 units × $22) + (15 units × $24) + (10 units × $25)] = $1,400 + $1,100 + $360 + $250

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