Question

Journal- Principles Chapter  5.pdf

Answer 1

First in first out
	A	B	C	A x C	B x C
	sold	End inventory	per unit	COGS	End inventory
From July 1	6		60	360
From July 8	5		67	335
From July 15	7	3	70	490	210
From July 26		5	85		425
Total				1185	635
Last in first out
	A	B	C	A x C	B x C
	sold	End inventory	per unit	COGS	End inventory
From July 1		6	60		360
From July 8	3	2	67	201	134
From July 15	10		70	700
From July 26	5		85	425
Total				1326	494
Avearge cost				COGS	End inventory
inventory available for sale			1820
Divided by: units available for sale			26
Average cost			70	18 units	8 units
Total				1260	560

	FIFO	LIFO	AVG COST
sales (18*125)	2250	2250	2250
Less: COGS	1185	1326	1260
Gross profit	1065	924	990
Ending inventory	635	494	560
FIFO method give Highest gross margin due to inflationary environment (due to Rising price)

First in first out
Date		units	per unit	cost	COGS	Inventory balance
Jul-01	Beg . Inv	6	60	360		360
Jul-08	purchase	5	67	335		695
Jul-10	From Jul 1	-6	60		360	335
	From Jul 8	-1	67		67	268
Jul-15	purchase	10	70	700		968
Jul-22	From Jul 8	-4	67		268	700
	From Jul 15	-4	70		280	420
Total		6			975	420
Last in first out
date		units	per unit	cost	COGS	Inventory balance
Jul-01	Beg. Inv	6	60	360		360
Jul-08	purchase	5	67	335		695
Jul-10	From Jul 8	-5	67		335	360
	From Jul 1	-2	60		120	240
Jul-15	purchase	10	70	700		940
Jul-22	From Jul 15	-8	70		560	380
Total		6			1015	380