Three identical units of merchandise were purchased during July, as follows:July 31024TotalPurchasePurchasePurchaseAverage cost per unitAssume one unit sells on July 28 for $34.Units Costa. First-in, first-outb. Last-in, first-outc. Weighted average cost1113$2023Determine the gross profit, cost of merchandise sold, and ending inventory on July 31 using the (a) first-in, first-out, (b) last-in, first-out, and (c) weightedaverage cost flow methods.Gross Profit26$69$23Cost of Merchandise Sold$$$Ending Inventory$

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Description: Three identical units of merchandise were purchased during July, as follows:July 31024TotalPurchasePurchasePurchaseAverage cost per unitAssume one unit sells on July 28 for $34.Units Costa. First-in, first-outb. Last-in, first-outc. Weighted average

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Three identical units of merchandise were purchased during July, as follows: July 3 10 24 Total Purchase Purchase Purchase Average cost per unit Assume one unit sells on July 28 for $34. Units Cost a. First-in, first-out b. Last-in, first-out c. Weighted average cost 1 1 1 3 $20 23 Gross Profit 26 Determine the gross profit, cost of merchandise sold, and ending inventory on July 31 using the (a) first-in, first-out, (b) last-in, first-out, and (c) weighted average cost flow methods. $69 $23 Cost of Merchandise Sold Ending Inventory

Three identical units of merchandise were purchased during July, as follows: July 3 10 24 Total Purchase Purchase Purchase Average cost per unit Assume one unit sells on July 28 for $34. Units Cost a. First-in, first-out b. Last-in, first-out c. Weighted average cost 1 1 1 3 $20 23 Gross Profit 26 Determine the gross profit, cost of merchandise sold, and ending inventory on July 31 using the (a) first-in, first-out, (b) last-in, first-out, and (c) weighted average cost flow methods. $69 $23 Cost of Merchandise Sold Ending Inventory

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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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

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Question

Three identical units of merchandise were purchased during July, as follows:
July 3
10
24
Total
Purchase
Purchase
Purchase
Average cost per unit
Assume one unit sells on July 28 for $34.
Units Cost
a. First-in, first-out
b. Last-in, first-out
c. Weighted average cost
1
1
1
3
$20
23
Determine the gross profit, cost of merchandise sold, and ending inventory on July 31 using the (a) first-in, first-out, (b) last-in, first-out, and (c) weighted
average cost flow methods.
Gross Profit
26
$69
$23
Cost of Merchandise Sold
$
$
$
Ending Inventory
$

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