Refer to the information in Exercise 6-7 and assume the periodic inventory system is used. 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
Refer to the information in Exercise 6-7 and assume the periodic inventory system is used. 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Refer to the information in Exercise 6-7 and assume the periodic inventory system is used. 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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fecb7ca72-e811-45c2-9e69-253854ef5343%2F17ed5960-60e7-460b-a5c7-1ad192ca7a65%2F70x9oj0o_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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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