Question

Casper Inc. buys and sells a household cleaning item for the last 8 years at their New
Jersey outlet.
The following information is for Casper Inc. for the month ended June 30 2018. Casper
Inc. uses the periodic method for inventory.
Date Description Quantity Unit Cost or Selling

Price
June 1 Opening Inventory 80 80
June 3 Purchase 270 86
June 5 Sale 220 140
June 9 Sale 15 25
June 11 Sales Return 30 140
June 13 Purchase 110 92
June 15 Purchase Return 20 92
June 17 Sale 130 152
June 19 Purchase 70 100

Required:
a. Calculate
(i) Ending Inventory,
(ii) Cost of Goods sold,
(iii) Gross Profit
Under each of the following methods. LIFO. (2) FIFO. (3) Average-cost.

b. From your calculations, analyze which method results in
1. The highest ending inventory, and
2. The highest cost of goods sold.

Answer 1

LIFO

Date	Particulars			Receipts			Issues			Balance
		Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
June1	Opening Invetory	80	80	6400	0	0	0	80	80	6400
June3	Purchase	270	86	23220	0	0	0	80	80	6400
								270	86	23220
June5	Sales	0	0	0	220	140	30800	80	80	6400
								50	86	4300
June9	Sales	0	0	0	15	25	375	80	80	6400
								35	86	3010
June11	Sales Returns	30	140	4200	0	0	0	80	80	6400
								65	86	5590
June13	Purchase	110	92	10120	0	0	0	80	80	6400
								65	86	5590
								110	92	10120
June15	Purchase Return	0	0	0	20	92	1840	80	80	6400
								65	86	5590
								90	92	8280
June17	Sales	0	0	0	130	152	19760	80	80	6400
								25	86	2150
June19	Purchase	70	100	7000	0	0	0	80	80	6400
								25	86	2150
								70	100	7000
June3	Closing Inventry							175		15550

LIFO

1. Inventry = 15550

2. Cost of Goods Sold=(220+15)*86=20210 +(90*92)+(40*86)=31930

3. Gross Profit=Sales-COGS

GP=50935-31930

=19005