1)Under LIFO Method, goods purchased latest are sold first
Transaction |
Quantity |
Rate |
Amount |
Jan1 Beginning Inventory |
60 |
15 |
900 |
Jan5 Purchases |
110 |
14 |
1,540 |
Jan8 Sale |
(90) |
14 |
(1,260) |
Jan10 Sales Return |
10 |
14 |
140 |
Jan15 Purchase |
35 |
18 |
630 |
Jan16 Purchase Return |
(10) |
18 |
(180) |
Jan20 Sales |
(25) |
18 |
(450) |
Jan20 Sales |
(30) |
14 |
(420) |
Jan20 Sales |
(35) |
15 |
(525) |
Jan25 Purchase |
10 |
20 |
200 |
Ending Inventory |
35 |
575 |
Cost of Goods Sold = $1,260-140+450+420+525 = $2,515
Gross Profit :
Sales 80*25 +90*25 = $4,250
Less: COGS = $2,515
Gross Profit = $1,735
2)FIFO
Inventory purchased first is sold first
Transaction |
Quantity |
Rate |
Amount |
Jan1 Beginning Inventory |
60 |
15 |
900 |
Jan5 Purchases |
110 |
14 |
1,540 |
Jan8 Sale |
(60) |
15 |
(900) |
Jan8 Sale |
(30) |
14 |
(420) |
Jan10 Sales Return |
10 |
14 |
140 |
Jan15 Purchase |
35 |
18 |
630 |
Jan16 Purchase Return |
(10) |
18 |
(180) |
Jan20 Sales |
(90) |
14 |
(1,260) |
Jan25 Purchase |
10 |
20 |
200 |
Ending Inventory |
35 |
650 |
Cost of Goods Sold = $900+420-140+1,260 = $2,440
Gross Profit :
Sales 80*25 +90*25 = $4,250
Less: COGS = $2,440
Gross Profit = $1,810
3)Moving Average Cost
Average cost is used to account for sales
Transaction |
Quantity |
Rate |
Amount |
Jan1 Beginning Inventory |
60 |
15 |
900 |
Jan5 Purchases |
110 |
14 |
1,540 |
Jan8 Sale |
(90) |
14.35 |
(1,291.5) |
Jan10 Sales Return |
10 |
14.35 |
143.5 |
Jan15 Purchase |
35 |
18 |
630 |
Jan16 Purchase Return |
(10) |
18 |
(180) |
Jan20 Sales |
(90) |
14.82 |
(1,333.8) |
Jan25 Purchase |
10 |
20 |
200 |
Ending Inventory |
35 |
608.2 |
Cost of Goods Sold = $1,291.5 – 143.5 + 1,333.8 = $2,481.8
Gross Profit :
Sales 80*25 +90*25 = $4,250
Less: COGS = $2,481.8
Gross Profit = $1,768.2
Chewy Inc is a retailer operating in the town. Chewy uses the perpetual inventory method. All...
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perpetual inventory method. All ales return from the customer result in the goods being returned to inventory, the inventory is not damage. Assume that there are no credit transactions; all amounts are settled in cash. You are provided with the following information for Chewy Inc. for the month of January 2018 Date Description Quantity Unit cost or selling price January 1 Beginning inventory January 5 Purchase January 8 Sale January 10 Sales returr January 15 Purchase January 16 Purchase return...
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Lily Inc. is a retailer operating in British Columbia. Lily
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Date
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Quantity
Unit Cost or Selling Price
January
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Beginning inventory
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Monty Inc. is a retailer operating in Centralia. Monty uses the
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Date
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Oriole Company is a retailer operating in Calgary, Alberta.
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