Tempo Ltd. is a retailer operating in Dartmouth, Nova Scotia. Tempo uses the perpetual inventory method. All sales returns from customers result in the goods being returned to inventory; the inventory is not damaged. Assume that there are no credit transactions; all amounts are settled in cash. You are provided with the following information for Tempo Ltd. for the month of January 2014. Unit Cost or Selling Price Date Description Ending inventory Purchase Quantity December 31 150 $19 January 2 January 6 January 9 January 9 January 10 January 10 January 23 January 30 100 21 Sale 150 40 Sale return 10 40 Purchase 75 24 Purchase return 15 24 Sale 50 45 Purchase Sale 100 26 160 50 Instructions (a) For each of the following cost flow assumptions, calculate (i) cost of goods sold, (ii) ending inventory, and (iii) gross profit. (1) LIFO. (2) FIFO. (3) Moving-average cost. (b) Compare results for the three cost flowassumptions.
Tempo Ltd. is a retailer operating in Dartmouth, Nova Scotia. Tempo uses the perpetual inventory method. All sales returns from customers result in the goods being returned to inventory; the inventory is not damaged. Assume that there are no credit transactions; all amounts are settled in cash. You are provided with the following information for Tempo Ltd. for the month of January 2014. Unit Cost or Selling Price Date Description Ending inventory Purchase Quantity December 31 150 $19 January 2 January 6 January 9 January 9 January 10 January 10 January 23 January 30 100 21 Sale 150 40 Sale return 10 40 Purchase 75 24 Purchase return 15 24 Sale 50 45 Purchase Sale 100 26 160 50 Instructions (a) For each of the following cost flow assumptions, calculate (i) cost of goods sold, (ii) ending inventory, and (iii) gross profit. (1) LIFO. (2) FIFO. (3) Moving-average cost. (b) Compare results for the three cost flowassumptions.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Tempo Ltd. is a retailer operating in Dartmouth, Nova
Scotia. Tempo uses the perpetual inventory method. All
sales returns from customers result in the goods being
returned to inventory; the inventory is not damaged.
Assume that there are no credit transactions; all amounts
are settled in cash. You are provided with the following
information for Tempo Ltd. for the month of January 2014.
Unit Cost or
Selling Price
Description
Ending inventory
Purchase
Date
Quantity
December 31
150
$19
January 2
January 6
January 9
January 9
January 10
January 10
January 23
January 30
100
21
Sale
Sale return
150
40
10
40
Purchase
75
15
24
Purchase return
Sale
Purchase
Sale
24
50
45
26
50
100
160
Instructions
(a) For each of the following cost flow assumptions, calculate
(i) cost of goods sold, (ii) ending inventory, and (iii) gross
profit.
(1) LIFO.
(2) FIFO.
(3) Moving-average cost.
(b) Compare results for the three cost flowassumptions.
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