Tree Seedlings has the following current-year purchases and sales for its only product.   Date Activities Units Acquired at Cost Units Sold at Retail January 1 Beginning inventory 40 units @ $2 = $ 80       January 3 Sales           30 units @ $8 February 14 Purchase 70 units @ $3 = $ 210       February 15 Sales           60 units @ $8 June 30 Purchase 90 units @ $4 = $ 360       November 6 Sales           86 units @ $8 November 19 Purchase 20 units @ $5 = $ 100         Totals 220 units     $ 750 176 units   Record journal entries for Tree Seedlings’ sales and purchases transactions. Assume for this assignment that the company uses a perpetual inventory system and LIFO. All sales and purchases are made on account, and no discounts are offered.   a. Determine the costs assigned to ending inventory and to cost of goods sold using FIFO. b. Determine the costs assigned to ending inventory and to cost of goods sold using LIFO. c. Compute the gross profit for each method.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Tree Seedlings has the following current-year purchases and sales for its only product.
 

Date Activities Units Acquired at Cost Units Sold at Retail
January 1 Beginning inventory 40 units @ $2 = $ 80      
January 3 Sales           30 units @ $8
February 14 Purchase 70 units @ $3 = $ 210      
February 15 Sales           60 units @ $8
June 30 Purchase 90 units @ $4 = $ 360      
November 6 Sales           86 units @ $8
November 19 Purchase 20 units @ $5 = $ 100      
  Totals 220 units     $ 750 176 units  

Record journal entries for Tree Seedlings’ sales and purchases transactions. Assume for this assignment that the company uses a perpetual inventory system and LIFO. All sales and purchases are made on account, and no discounts are offered.

 

a. Determine the costs assigned to ending inventory and to cost of goods sold using FIFO.
b. Determine the costs assigned to ending inventory and to cost of goods sold using LIFO.
c. Compute the gross profit for each method.

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