Question

Requirement 1. The preceding data are taken from the store's perpetual inventory records. Which cost method does the store use? Explain how you arrived at your answer. Gold Medal Sports uses FIFO This is apparent from the flow of costs out of inventory. For example, the August 13 sale shows unit cost of $31, which came from the beginning inventory . This is how FIFO, and only FIFO, works. Requirement 2. Determine the store's cost of goods sold for August. Also compute gross profit for August. The cost of goods sold is $ . The gross profit for August is $ Requirement 3. What is the cost of the store's August 31 inventory of running shoes? i Data Table The cost of the company's inventory at August 31 is $ . Units 16 Aug Unit Cost Unit Sales Price $ 31 $ 63 33 31 63 3364 2 Sale ............ 9 Purchase .... 13 Sale ........... 18 Sale .......... 22 Sale ......... 29 Purchase ........ 26 Print Done Enter any number in the edit fields and then continue to the next question.

Answer 1

Uses FIFO

Unit cost of $31

Beginning Inventory

FIFO and only FIFO

COGS = 16*31+26*31+13*33+36*33 = $2,919

Gross Profit = Sales – COGS

= $2,863

Inventory = (81-13-36)*33 + 18*35

= $1,686