Question

e of dolls during December as follows: i Requirements ost of of end saction chre 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 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? Indis uantit Print Done

Answer 1

Inventory on Hand Perpectual FIFO Purchases Cost of Goods Sold Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Date Quantity 14 Unit Cost S 11 Total Cost $ 154 Dec-01 Dec-08 6 $ 11$ 66 Dec-14 16 $ 14 $ 224 8 8 16 $ S $ 11$ 11 S 14 $ 88 88 224 Dec-21 8 6 $ S 11 14 $ S 88 84 10 $ 14 $ 140 Total 16 $ 224 20 S 238 10 $ 140 Cost of Goods Sold Cost of Ending merchandise inventory Gross Profit $ $ $ 238 140 122 Gross Profit Sales (6* $ 18 + 14 * $ 18) Less : Cost of Goods Sold Gross Profit $ $ $ 360 (238) 122

Perpectual LIFO Purchases Cost of Goods Sold Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Date Quantity 14 Inventory on Hand Unit Cost Total Cost S 11 S 154 Dec-01 Dec-08 6 $ 1$ 66 8 Dec-14 16 $ 14$ 224 $ $ $ 1 1 14 $ $ $ 16 224 Dec-21 14 $ 14 $ 196 8 2 S $ 11 S 14 $ 88 28 Total 16 224 20 $ 262 10 $ 116 Cost of Goods Sold Cost of Ending merchandise inventory Gross Profit $ $ $ 262 116 98 Gross Profit Sales (6* $ 18 +14 * $ 18) Less: Cost of Goods Sold Gross Profit $ $ $ 360 (262) 98

3) The method with higher Cost of Goods Sold is LIFO Inventory Costing method. 4) The method with higher cost of ending merchandise inventory is FIFO Inventory costing method. 5) The method with the higher gross profit is FIFO Inventory method.