Cost of Goods SoldAs an accountant for Lee Company, your supervisor gave you the following calculations of the gross profit for the first quarter: AlternativeSales ($50 per unit) Cost of Goods SoldGross Profit A$500,000$200,000$300,000B500,000228,000272,000C500,000213,333286,667 The three alternative cost flow assumptions are FIFO, average, and LIFO (the alternatives are not necessarily presented in this sequence). Lee uses the periodic inventory system. The computation of the cost of goods sold under each alternative is based on the following data: UnitsCost/Unit Inventory, January 112,000$20Purchase, January 104,00021Purchase, February 156,00022Purchase, March 108,00023 1. Prepare schedules proving the cost of goods sold shown here under each of the three alternatives. For average cost. LEE COMPANYSchedules of Cost of Goods SoldFor First Quarter Ended March 31 FIFOLIFOAverageBeginning inventory Purchases Cost of goods available for sale Less: Ending inventory Cost of goods sold 2. Prepare schedules computing the ending inventory (in units) under each of the three alternatives.Schedules for Ending Inventory UnitsBeginning inventory Purchases Units available for sale Less: Sales Ending inventory Prepare schedules computing the ending inventory (in dollars) under each of the three alternatives. For average cost FIFO Dollars LIFO Dollars Average Dollars

Name: Cost of Goods SoldAs an accountant for Lee Company, your supervisor ga
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Description: Cost of Goods SoldAs an accountant for Lee Company, your supervisor gave you the following calculations of the gross profit for the first quarter: AlternativeSales ($50 per unit) Cost of Goods SoldGross Profit A$500,000$200,000$300,000B500,000228,000

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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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Cost of Goods Sold

As an accountant for Lee Company, your supervisor gave you the following calculations of the gross profit for the first quarter:

Alternative	Sales ($50 per unit)	Cost of Goods Sold	Gross Profit

A	$500,000	$200,000	$300,000
B	500,000	228,000	272,000
C	500,000	213,333	286,667

The three alternative cost flow assumptions are FIFO, average, and LIFO (the alternatives are not necessarily presented in this sequence). Lee uses the periodic inventory system. The computation of the cost of goods sold under each alternative is based on the following data:

	Units	Cost/Unit

Inventory, January 1	12,000	$20
Purchase, January 10	4,000	21
Purchase, February 15	6,000	22
Purchase, March 10	8,000	23

1. Prepare schedules proving the cost of goods sold shown here under each of the three alternatives. For average cost.

LEE COMPANY
Schedules of Cost of Goods Sold
For First Quarter Ended March 31
	FIFO	LIFO	Average
Beginning inventory
Purchases
Cost of goods available for sale
Less: Ending inventory
Cost of goods sold

2. Prepare schedules computing the ending inventory (in units) under each of the three alternatives.

Schedules for Ending Inventory


	Units
Beginning inventory
Purchases
Units available for sale
Less: Sales
Ending inventory

Prepare schedules computing the ending inventory (in dollars) under each of the three alternatives. For average cost

FIFO
	Dollars

LIFO
	Dollars

Average
	Dollars

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