You are provided with the following information for Pavey Inc. for the month ended October 31, 2010. Pavey uses a periodic method for inventory.
|
Unit Cost or |
|||
|
Date |
Description |
Units |
Selling Price |
|
October 1 |
Beginning inventory |
60 |
$25 |
|
October 9 |
Purchase |
120 |
26 |
|
October 11 |
Sale |
100 |
35 |
|
October 17 |
Purchase |
70 |
27 |
|
October 22 |
Sale |
60 |
40 |
|
October 25 |
Purchase |
80 |
28 |
|
October 29 |
Sale |
110 |
40 |
Instructions
(a) Calculate (i) ending inventory, (ii) cost of goods sold, (iii) gross profit, and (iv) gross profit rate under each of the following methods.
(1) LIFO.
(2) FIFO.
(3) Average cost.
(b) Compare results for the three cost flow assumptions.