Vasquez Ltd. is a retailer operating in Edmonton,Alberta.Vasquez uses the perpetual inventory method.All sales returns from customers result in the goods being returned to inventory; the inventory is not damaged.Assume that there are no credit transactions; all amounts are settled in cash.
You are provided with the following information for Vasquez Ltd. for the month of January 2010.
|
Unit Cost or |
|||
|
Date |
Description |
Quantity |
Selling Price |
|
December 31 |
Ending inventory |
150 |
$17 |
|
January 2 |
Purchase |
100 |
21 |
|
January 6 |
Sale |
150 |
40 |
|
January 9 |
Sale return |
10 |
40 |
|
January 9 |
Purchase |
75 |
24 |
|
January 10 |
Purchase return |
15 |
24 |
|
January 10 |
Sale |
50 |
45 |
|
January 23 |
Purchase |
100 |
28 |
|
January 30 |
Sale |
110 |
50 |
Instructions
(a) For each of the following cost flow assumptions, calculate (i) cost of goods sold, (ii) ending inventory, and (iii) gross profit.
(1) LIFO. (2) FIFO. (3) Moving average cost.
(b) Compare results for the three cost flow assumptions.