Assume that Bean Town Coffee Shop completed the following periodic inventory transactions for a line of merchandise inventory: (Click the icon to view the transactions.) Read the requirements. FIFO LIFO Weighted Average More info Beginning merchandise inventory Plus: Cost of goods available for sale Ending merchandise inventory Less: Sales revenue Cost of goods sold Now compute the gross profit under each inventory costing method. Sales Revenue Cost of Goods Sold Gross Profit Requirement 1. FIFO Jun. 1 Beginning merchandise inventory 15 units @ $30 each Jun. 12 Purchase 8 units @ $31 each Jun. 20 Sale Requirement 2. LIFO Jun. 24 Purchase Requirement 3. Weighted-Average Jun. 29 Sale 1242 792 502 466 Print Done 14 units @ $37 each 17 units @ $32 each 20 units @ $37 each - X Time Limit: 03:00:00 Next

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.