Assume that Toys Galore store purchased and sold a line of dolls during December as follows: Dec. 1 Beginning merchandise inventory 13 units @ $9 each Dec. 8 Sale 8 units @ $22 each Dec. 14 Purchase 16 units @ $14 each Dec. 21 Sale 14units @$22 each Read the requirements. 1. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the FIFO inventory costing method. 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? 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 Inventory on hand Unit Total Unit Total Unit Total Date Quantity Cost Cost Quantity Cost Cost Quantity Cost Cost Dec. 1 Dec. 8 Dec. 14 Dec. 21 Totals Compute the gross profit using the using the FIFO inventory costing method. Gross profit is using the FIFO inventory costing method. Requirement 2. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the LIFO inventory costing method. Begin by computing the cost of goods sold and cost of ending merchandise inventory using the LIFO 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 Inventory on Hand Unit Total Unit Total Unit Total Date Quantity Cost Cost Quantity Cost Cost Quantity Cost Cost Dec. 1 Dec. 8 Dec. 14 Dec. 21 Totals Compute the gross profit using the using the LIFO inventory costing method. Gross profit is using the LIFO inventory costing method. Requirement 3. Which method results in a higher cost of goods sold? The method with the higher cost of goods sold is ▼ FIFO. LIFO. neither, they are equal. Requirement 4. Which method results in a higher cost of ending merchandise inventory? The method with the higher cost of ending merchandise inventory is ▼ FIFO. LIFO. neither, they are equal. Requirement 5. Which method results in a higher gross profit? The method with the higher gross profit is ▼ FIFO. LIFO. neither, they are equal. Enter any number in the edit fields and then continue to the next question.

Assume that Toys Galore store purchased and sold a line of dolls during December as follows: Dec. 1 Beginning merchandise inventory 13 units @ $9 each Dec. 8 Sale 8 units @ $22 each Dec. 14 Purchase 16 units @ $14 each Dec. 21 Sale 14units @$22 each Read the requirements. 1. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the FIFO inventory costing method. 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? 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 Inventory on hand Unit Total Unit Total Unit Total Date Quantity Cost Cost Quantity Cost Cost Quantity Cost Cost Dec. 1 Dec. 8 Dec. 14 Dec. 21 Totals Compute the gross profit using the using the FIFO inventory costing method. Gross profit is using the FIFO inventory costing method. Requirement 2. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the LIFO inventory costing method. Begin by computing the cost of goods sold and cost of ending merchandise inventory using the LIFO 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 Inventory on Hand Unit Total Unit Total Unit Total Date Quantity Cost Cost Quantity Cost Cost Quantity Cost Cost Dec. 1 Dec. 8 Dec. 14 Dec. 21 Totals Compute the gross profit using the using the LIFO inventory costing method. Gross profit is using the LIFO inventory costing method. Requirement 3. Which method results in a higher cost of goods sold? The method with the higher cost of goods sold is ▼ FIFO. LIFO. neither, they are equal. Requirement 4. Which method results in a higher cost of ending merchandise inventory? The method with the higher cost of ending merchandise inventory is ▼ FIFO. LIFO. neither, they are equal. Requirement 5. Which method results in a higher gross profit? The method with the higher gross profit is ▼ FIFO. LIFO. neither, they are equal. Enter any number in the edit fields and then continue to the next question.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Assume that

Toys Galore

store purchased and sold a line of dolls during

December

as follows:

Dec. 1 Beginning merchandise inventory 13 units @ $9 each

Dec. 8 Sale 8 units @ $22 each

Dec. 14 Purchase 16 units @ $14 each

Dec. 21 Sale 14units @$22 each

Read the requirements.

1.	Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the FIFO inventory costing method.
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?

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			Inventory on hand
		Unit	Total		Unit	Total		Unit	Total
Date	Quantity	Cost	Cost	Quantity	Cost	Cost	Quantity	Cost	Cost
Dec. 1
Dec. 8
Dec. 14

Dec. 21

Totals

Compute the gross profit using the using the FIFO inventory costing method.

Gross profit is

using the FIFO inventory costing method.

Requirement 2. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the LIFO inventory costing method.

Begin by computing the cost of goods sold and cost of ending merchandise inventory using the LIFO 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	Inventory on Hand
		Unit	Total		Unit	Total		Unit	Total
Date	Quantity	Cost	Cost	Quantity	Cost	Cost	Quantity	Cost	Cost
Dec. 1
Dec. 8
Dec. 14

Dec. 21

Totals

Compute the gross profit using the using the LIFO inventory costing method.

Gross profit is

using the LIFO inventory costing method.

Requirement 3. Which method results in a higher cost of goods sold?

The method with the higher cost of goods sold is

▼

FIFO.

LIFO.

neither, they are equal.

Requirement 4. Which method results in a higher cost of ending merchandise inventory?

The method with the higher cost of ending merchandise inventory is

▼

FIFO.

LIFO.

neither, they are equal.

Requirement 5. Which method results in a higher gross profit?

The method with the higher gross profit is

▼

FIFO.

LIFO.

neither, they are equal.

Enter any number in the edit fields and then continue to the next question.

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