Assume that Toys Galore store purchased and sold a line of dolls during December as follows: View the transactions. Toys Galore uses the perpetual inventory system. Requirement 1. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the FIFO inventory costing method. Begin by computing the cost of goods sold and cost of ending merchandise inventory using the FIFO inventory costing method. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.) Purchases Cost of Goods Sold Requirements Inventory on Hand Unit Total Unit Total Date Quantity Cost Cost Quantity Cost Cost Quantity Unit Cost Total Cost Dec. 1 1. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the FIFO inventory costing method. Dec. 8 Dec. 14 Dec. 21 Totals 2. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the LIFO inventory costing method. 3. Which method results in a higher cost of goods sold? 4. Which method results in a higher cost of ending merchandise inventory? 5. Which method results in a higher gross profit? Transactions Dec. 1 Beginning merchandise inventory 14 units @ $10 each 8 Sale 9 units @ $ 23 each 14 Purchase 15 units @ $ 14 each 21 Sale 13 units @ $ 23 each - ☑
Assume that Toys Galore store purchased and sold a line of dolls during December as follows: View the transactions. Toys Galore uses the perpetual inventory system. Requirement 1. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the FIFO inventory costing method. Begin by computing the cost of goods sold and cost of ending merchandise inventory using the FIFO inventory costing method. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.) Purchases Cost of Goods Sold Requirements Inventory on Hand Unit Total Unit Total Date Quantity Cost Cost Quantity Cost Cost Quantity Unit Cost Total Cost Dec. 1 1. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the FIFO inventory costing method. Dec. 8 Dec. 14 Dec. 21 Totals 2. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the LIFO inventory costing method. 3. Which method results in a higher cost of goods sold? 4. Which method results in a higher cost of ending merchandise inventory? 5. Which method results in a higher gross profit? Transactions Dec. 1 Beginning merchandise inventory 14 units @ $10 each 8 Sale 9 units @ $ 23 each 14 Purchase 15 units @ $ 14 each 21 Sale 13 units @ $ 23 each - ☑
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Assume that Toys Galore store purchased and sold a line of dolls during December as follows:
View the transactions.
Toys Galore uses the perpetual inventory system.
Requirement 1. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the FIFO inventory costing method.
Begin by computing the cost of goods sold and cost of ending merchandise inventory using the FIFO inventory costing method. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction.
Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.)
Purchases
Cost of Goods Sold
Requirements
Inventory on Hand
Unit
Total
Unit
Total
Date
Quantity
Cost
Cost
Quantity
Cost
Cost
Quantity
Unit
Cost
Total
Cost
Dec. 1
1. Compute the cost of goods sold, cost of ending merchandise inventory, and
gross profit using the FIFO inventory costing method.
Dec. 8
Dec. 14
Dec. 21
Totals
2. Compute the cost of goods sold, cost of ending merchandise inventory, and
gross profit using the LIFO inventory costing method.
3. Which method results in a higher cost of goods sold?
4. Which method results in a higher cost of ending merchandise inventory?
5. Which method results in a higher gross profit?
Transactions
Dec. 1 Beginning merchandise inventory
14
units @ $10 each
8 Sale
9
units @ $ 23 each
14 Purchase
15
units @ $ 14 each
21 Sale
13
units @ $ 23 each
-
☑
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