You have the following information for Waner Inc. for the month ended June 30, 2010. Waner uses the periodic method for inventory.
|
Date |
Description |
Quantity |
Unit Cost or |
|
June 1 |
Beginning inventory |
25 |
$60 |
|
June 4 |
Purchase |
85 |
64 |
|
June 10 |
Sale |
70 |
90 |
|
June 11 |
Sale return |
5 |
90 |
|
June 18 |
Purchase |
35 |
68 |
|
June 18 |
Purchase return |
15 |
68 |
|
June 25 |
Sale |
55 |
95 |
|
June 28 |
Purchase |
20 |
70 |
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.