Chapter 6, Problem 6.19E

Comparing amounts for cost of goods sold, ending inventory, and gross profit-FIFO and LIFO

Assume that Toyland store bought and sold a line of dolls during December as follows:

Dec. 1	Beginning merchandise inventory	11 units@ $ 8 each
8	Sale	6 units@$ 21 each
14	Purchase	17 units@$ 15 each
21	Sale	15 units @ $ 21 each

Requirements

1. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the FIFO inventory costing method.

2. Compute the cost of good s sold, cost of ending merchandise inventory, and gross profit using the LIFO inventory costing method.

3. Which method results in a higher cost of goods sold?

4. Which method results in a higher cost of ending merchandise inventory?

5. Which method results in a higher gross profit?