Question

(a2) For each of the following cost flow assumptions, calculate (i) cost of goods sold, (ii) ending inventory, and (iii) gross profit. (Round answers to 0 decimal places, e.g. 125.) (1) LIFO. (2) FIFO. (3) Moving-average. LIFO FIFO Moving-average Cost of goods sold Ending inventory श्री " Gross profit जी "

Oriole Company is a retailer operating in Calgary, Alberta. Oriole uses the perpetual inventory method. Assume that there are no credit transactions; all amounts are settled in cash. You are provided with the following information for Oriole for the month of January 2022.

Dec.31 Ending Inventory - 175 units - $20 each

Jan 2. Purchase - 105 units - $28 each

Jan 6. Sale 193 units - $44 each

Jan 9. Purchase 58 units - $25 each

Jan 10. Sale 50 units - $41 each

Jan 23. Purchase 105 units - $27 each

Jan 30. Sale 125 units - $47 each

Answer 1

Solution: Oriole Company 1 Ending Inventory under perpetual Inventory System by LIFO method Purchase Unit Cost Cost of Goods Sold Units Unit Cost Total Units Total Date | Jan. 1, 2022 Jan.2, 2022 Balance Unit Cost $20 $20 $28 $20 Total $3,500 $6,440 105 | Units 175 175 105 87 $28 2,940 Jan. 6, 2022 105 $1,740 $28 $20 88 $4,700 Jan. 9 58 $25 $1,450 $20 S25 $3,190 Jan. 10 50 $25 $1,250 $20 $1,940 8 Jan, 23 105 $27 $2,835 $25 $20 $25 $27 $4,775 105 Jan. 30 105 $27 $25 $20 $3,275 75 $20 $1,500

Ending Inventory = $1,500 Cost of Goods Sold = $4,700 + $1,250 + $3,275 = $9,225 Gross Margin Calculation of Total Sales: Date Units Sold Sale Value 193 $8,492 Jan. 10 | 50 $2,050 Jan. 30 125 $5,875 $16,4171 (193 x 44) (50 x 41) (125 x 47) Calculation of Gross Margin: Total Sales $16,417 Less: Cost of Goods Sold 9,225 Gross Margin $7,192 Gross Margin = $7,192

Ending Inventory under Perpetual Inventory System by FIFO Method Purchase Unit Cost Cost of Goods Sold Units Unit Cost Total Units Total Date Jan. 1, 2022 Jan.2, 2022 Total $3,500 Units 175 175 105 Balance Unit Cost $20 $20 $28 $28 105 $28 2,940 $6,440 Jan. 6, 2022 $2,436 175 18 $20 $28 $4,004 Jan. 9 58 $25 $1,450 $28 $3,886 Jan. 10 50 $28 $1,400 $25 $28 $25 $2,486 Jan, 23 105 $27 $2,835 $28 $25 $27 $5,321 Jan. 30 37 $28 $25 $3,296 75 $27 $2,025 $27

Ending Inventory = $2,025 Cost of Goods Sold = $4,004 + $1,400 + $3,296 = $8,700 Gross Margin Calculation of Total Sales: Date Units Sale Sold Value Jan. 6 193 $8,492 Jan. 10 50 $2,050 Jan. 30 125 $5,875 $16,417 Calculation of Gross Margin: Total Sales $16,417 Less: Cost of Goods Sold 8,700 Gross Margin $7,717 Gross Margin = $7,717

Ending Inventory under perpetual Inventory System by moving average cost method Units Purchase Unit Cost Total Cost of Goods Sold Units Unit Cost Total Date Jan. 1, 2022 Jan.2, 2022 Balance Unit Cost $20 105 $28 2 ,940 Units 175 175 105 280 Total $3,500 $3,500 2,940 $6,440 $2,001 $2,001 | $23 Jan. 6, 2022 193 $23 $4,439 87 87 $23 Jan. 9 58 $25 $1,450 145 $23.8 Jan. 10 50 $23.8 $1,190 $2,001 $1,450 $3,451 $2,261 $2,261 $2,261 $2,835 $5,096 | $23.8 Jan, 23 105 $27 $2,835 95 95 105 200 $25.48 Jan. 30 125 $25.48 $3,185 75 $25.48 $1,911

Ending Inventory = $1,911 Cost of Goods Sold = $4,439 + $1,190 + $3,185 = $8,814 Gross Margin Calculation of Total Sales: Date Units Sale Sold Value Jan. 6 193 $8,492 Jan. 10 50 $2,050 Jan. 30 125 $5,875 $16,417 Calculation of Gross Margin: Total Sales $16,417 Less: Cost of Goods Sold 8,814 Gross Margin $7,603 Gross Margin = $7,603

Cost of Goods Sold Ending Inventory Gross Profit LIFO $9,225 $1,500 $7,192 FIFO $8,700 $2,025 $7,717 MOVING-AVERAGE $8,814 $1,911 $7,603