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Math Help - Inventories FIFO

  1. #1
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    Inventories FIFO

    I need help finding the gross profit which is $11,420 and setting this problem up in excel. I have been working this problem a week straight and getting the wrong answer.

    Date Transaction Number of Units Per Unit Total
    Jan 1 Inventory 50 $20 $1,000
    7th Purchase 200 $22 $4,400
    20th Sale 90 $40 $3,600
    30th Sale 110 $40 $4,400
    Feb 8 Sale 20 $44 $880
    10th Purchase 130 $23 $2,990
    27th Sale 90 $42 $3,780
    28th Sale 50 $45 $2,250
    Mar 5 Purchase 180 $24 $4,320
    13th Sale 90 $50 $4,500
    23rd Purchase 100 $26 $2,600
    30th Sale 80 $50 $4,000

    1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record using the first in, first out method.

    2. Determine the total sales and the total cost of merchandise sold for the period. Journalize the entries in the sales and cost merchandise sold accounts. Assume that all the sales were on account.

    3. Determine the gross profit from sales for the period. ($11,420)
    4. Determine the ending inventory cost.
    Last edited by curlyman; January 24th 2010 at 05:43 AM.
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  2. #2
    MHF Contributor
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    Quote Originally Posted by curlyman View Post
    Date Transaction Number of Units Per Unit Total
    Jan 1 Inventory 50 $20 $1,000
    7th Purchase 200 $22 $4,400
    20th Sale 90 $40 $3,600
    30th Sale 110 $40 $4,400
    Feb 8 Sale 20 $44 $880
    10th Purchase 130 $23 $2,990
    27th Sale 90 $42 $3,780
    28th Sale 50 $45 $2,250
    Mar 5 Purchase 180 $24 $4,320
    13th Sale 90 $50 $4,500
    23rd Purchase 100 $26 $2,600
    30th Sale 80 $50 $4,000
    Total items purchased (includes inventory): 50+200+130+180+100 = 660
    Total items sold: 90+110+20+90+50+90+80 = 530

    So 660-530 = 130 items are left, made up of (from last purchases):
    Mar 23: 100 @ 26 = 2600
    Mar 5: 30 @ 24 = 720
    Total of 3320 = ending inventory

    Sales : 23410
    Purchases: 15310 (includes inventory)
    Profit: 23410-15310 = 8100
    Add ending inventory: 8100 + 3320 = 11420

    That's how 11,420 is arrived at.
    I'm not familiar with Excel...so good luck...
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