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    elsee kezia
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    This document compares FIFO and LIFO inventory costing assumptions using a series of purchase and sale transactions. Under FIFO, cost of goods sold is $13,050 resulting in a gross profit of $10,550 and ending inventory of $7,350. Under LIFO, cost of goods sold is $14,600 resulting in a gross profit of $9,000 and ending inventory of $5,800.

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    This document compares FIFO and LIFO inventory costing assumptions using a series of purchase and sale transactions. Under FIFO, cost of goods sold is $13,050 resulting in a gross profit of $10,550 and ending inventory of $7,350. Under LIFO, cost of goods sold is $14,600 resulting in a gross profit of $9,000 and ending inventory of $5,800.

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    4 views2 pages

    Acccounting

    Uploaded by

    elsee kezia
    This document compares FIFO and LIFO inventory costing assumptions using a series of purchase and sale transactions. Under FIFO, cost of goods sold is $13,050 resulting in a gross profit of $10,550 and ending inventory of $7,350. Under LIFO, cost of goods sold is $14,600 resulting in a gross profit of $9,000 and ending inventory of $5,800.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    of 2

    FIFO Assumption

    DATE PURCHASES COGS BALANCE


    1-Mar (100 @$40) $4000
    3-Mar (60 @50) $3000 (100 @$40)
    $7000
    (60 @$50)
    4-Mar (70 @40) $2800 (30 @$40)
    $4200
    (60 @$50)
    10-Mar (200 @55) $11000 (30 @$40)
    (60 @$50) $15200
    (200 @$55)
    16-Mar (30 @$40) (10 @$50)
    $11500
    (50 @$50) $3700 (200 @55)
    19-Mar (40 @$60) $2400 (10 @$50)
    (200 @55) $13900
    (40 @$60)
    25-Mar (10 @$50) (90 @$55)
    $7350
    (110 @$55) $6550 (40 @$60)

    Cost of Goods Sold = (2800 + 3700 + 6550) = $13050


    Net Sales = (70 x 80) + (80 x 90) + (120 x 90) =$23600
    Gross Profit = $23600 - $13050 = $10550
    Inventory = $7350
    LIFO Assumption

    DATE PURCHASE COST OF GOODS SOLD BALANCE


    1-Mar (100 @$40) $4000
    3-Mar (60 @$50) $3000 (100 @$40)
    $7000
    (60 @$50)
    4-Mar (60 @$50)
    (10 @$40) $3400 (90 @$40) $3600
    10-Mar (200 @$55) $11500 (90 @$40)
    $14600
    (200 @$55)
    16-Mar (80 @$55) $4400 (90 @$40)
    $10200
    (120 @$55)
    19-Mar (40 @$60) $2400 (90 @$40)
    (120 @$55) $12600
    (40 @$60)
    25-Mar (40 @$60) (90 @$40)
    $5800
    (80 @$55) $6800 (40 @$55)

    Cost of Goods Sold = (3400 + 4400 + 6800) = $14600


    Net Sales = (70 x 80) + (80 x 90) + (120 x 90) = $23600
    Gross Profit = $23600 - $14600 = $9000
    Inventory = 5800

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