Effect of inventory cost flow (FIFO, LIFO, and weighted average) on gross margin
The following information pertains to Ping Company for 2011.
Beginning inventory | 40 units @ $20 |
Units purchased | 200 units @ $25 |
Ending inventory consisted of 30 units. Ping sold 210 units at $50 each. All purchases and sales were made with cash.
Required
a. Compute the gross margin for Ping Company using the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average.
b. What is the amount of net income using FIFO, LIFO, and weighted average? (Ignore income tax considerations.)
c. Compute the amount of ending inventory using (1) FIFO, (2) LIFO, and (3) weighted average.
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