PR 7-2B LIFO perpetual inventory

The beginning inventory for Francesca Co and data on purchases and sales for a threemonth
period are shown in Problem 7-1B.

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:
1.
 Purchases Cost of Merchandise Sold Inventory  
Date  
Quantity 
Unit Cost 
Total Cost  
Quantity 
Unit Cost 
Total Cost  
Quantity 
Unit Cost 
Total Cost July 3        75 1,500 112,500  8  150  1,800  270,000     75  150 1,500 1,800 112,500 270,000  11    90 1,800162,000 75  60 1,500 1,800 112,500 108,000  30    45  1,80081,000 75  15 1,500 1,800 112,500 27,000 Aug. 8  125  2,000  250,000   75  15  125 1,500 1,800 2,000 112,500 27,000 250,000  10    110 2,000220,000 75  15  15 1,500 1,800 2,000 112,500 27,000 30,000  19    15 15 50 2,000  1,800 1,500 30,000  27,000 75,000     25  1,500   37,500  28  100  2,200  220,000     25  100 1,500 2,200 37,500 220,000 

2. Total sales....................................................................... $1,675,000
Total cost of merchandise sold.....................................  1,046,000
Gross profit..................................................................... $ 629,000

3. $238,500 = [(15 units × $1,500) + (90 units × $2,400)] = $22,500 + $216,000

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