The beginning inventory at Keats Office Supplies and data on purchases and sales for a three-month period are as follows:
1. Based the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 3, 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 of merchandise sold accounts. Assume that all sales were on account.
3. Determine the gross profit from sales for the period.
4. Determine the ending inventory cost.
5. Based upon the preceding data, would you expect the inventory using the last-in, first-out method to be higher orlower?