Chapter 5, Problem 6YT

Jayne’s Jewelry Store purchased three diamond and emerald bracelets during March. The price of diamonds has fluctuated wildly during the month, causing the supplying firm to change the price of the bracelets it sells to Jayne’s Jewelry Store.

1. a. On March 5, the first bracelet cost $4,600.
2. b. On March 15, the second bracelet cost $5,100.
3. c. On March 20, the third bracelet cost $3,500.

Suppose Jayne’s Jewelry Store sold two of these bracelets for $7,000 each.

1. 1. Using FIFO, what is the cost of goods sold for these sales? What is the gross profit?
2. 2. Using LIFO, what is the cost of goods sold for these sales? What is the gross profit?
3. 3. Using weighted average cost, what is the cost of goods sold?