Learning Objective 2: Compare ending inventory and cost of goods sold—FIFOvs. LIFO) Paulson’s specializes in sound equipment. Company records indicate the followingdata for a line of speakers:Unit Cost$4964JunDate12713ItemBalance...................Purchase.................Sale ........................Sale ........................Quantity18376Sale Price$115103Requirements1. Determine the amounts that Paulson’s should report for cost of goods sold and endinginventory two ways:a. FIFOb. LIFO2. Paulson’s uses the FIFO method. Prepare the company’s income statement for the monthended June 30, 2018, reporting gross profit. Operating expenses totaled $340, and theincome tax rate was 35%.
Learning Objective 2: Compare ending inventory and cost of goods sold—FIFO
vs. LIFO) Paulson’s specializes in sound equipment. Company records indicate the following
data for a line of speakers:
Unit Cost
$49
64
Jun
Date
1
2
7
13
Item
Balance...................
Purchase.................
Sale ........................
Sale ........................
Quantity
18
3
7
6
Sale Price
$115
103
Requirements
1. Determine the amounts that Paulson’s should report for cost of goods sold and ending
inventory two ways:
a. FIFO
b. LIFO
2. Paulson’s uses the FIFO method. Prepare the company’s income statement for the month
ended June 30, 2018, reporting gross profit. Operating expenses totaled $340, and the
income tax rate was 35%.
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