Chapter 6, Problem E6.19E

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

Learning Objective 2, 3 2. Ending March. Inv. $73

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

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Dec. 1 Beginning merchandise inventory			 13 units @ $ 9 each
      8       Sale 					8units@$22each
     14   Purchase 					16 units @ $14 each
     21  Sale 						14 units @$ 22 each

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Requirements

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