Determine the costs assigned to ending inventory and to cost of goods sold using (a) FIFO and (b) LIFO. Then (c) compute the gross margin for each method DateActivitiesUnits Acquired at CostUnits Sold at RetailJan. 1200 units e $10 = $ 2.000Beginning inventorySales...14.Jan. 10150 units @ $40Mar 14Purchase350 units a $15 =5,250Mar. 15Sales..300 units e $40July 30Purchase450 units a $20 =9,000Oc. 5Sales...-430 units a $40Oct. 26Purchase100 units a $25% =2,500%3DTotals1,100 units$18,750880 unitsCS Scanned with CamScanner

The Last-In, First-Out (LIFO) strategy expects that the last unit to show up in stock or later is…

Date Activities Units Acquired at Cost Units Sold at Retail Jan. Beginning inventory Sales... 1 200 units e $10 =$ 2,000 Jan. 10 150 units a $40 Mar 14 Purchase 350 units e $15 = 5,250 Mar 15 Sales.. 300 units @ $40 July 30 Purchase 450 units a $20 = 9,000 Oc. Sales... 430 units a $40 Oct. 26 Purchase 100 units @ $25%3D 2,500 Totals 1,100 units $18.750 880 units

Date Activities Units Acquired at Cost Units Sold at Retail Jan. Beginning inventory Sales... 1 200 units e $10 =$ 2,000 Jan. 10 150 units a $40 Mar 14 Purchase 350 units e $15 = 5,250 Mar 15 Sales.. 300 units @ $40 July 30 Purchase 450 units a $20 = 9,000 Oc. Sales... 430 units a $40 Oct. 26 Purchase 100 units @ $25%3D 2,500 Totals 1,100 units $18.750 880 units

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

Determine the costs assigned to ending inventory and to cost of goods sold using (a) FIFO and (b) LIFO. Then (c) compute the gross margin for each method

Date
Activities
Units Acquired at Cost
Units Sold at Retail
Jan. 1
200 units e $10 = $ 2.000
Beginning inventory
Sales...
14.
Jan. 10
150 units @ $40
Mar 14
Purchase
350 units a $15 =
5,250
Mar. 15
Sales..
300 units e $40
July 30
Purchase
450 units a $20 =
9,000
Oc. 5
Sales...-
430 units a $40
Oct. 26
Purchase
100 units a $25% =
2,500
%3D
Totals
1,100 units
$18,750
880 units
CS Scanned with CamScanner

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