Dugan Sales had the following transactions for jackets in 2013, its first year of operations:

During the year, Dugan Sales sold 830 jackets for $40 each.

Required
a. Compute the amount of ending inventory Dugan would report on the balance sheet, assuming the following cost flow assumptions:
(1) FIFO,
(2) LIFO,
(3) Weighted average.
b. Record the above transactions in general journal form and post to T-accounts using
(1) FIFO,
(2) LIFO,
(3) Weighted average.
Use a separate set of journal entries and T-accounts for each method. Assume all transactions are cash transactions.
c. Compute the difference in gross margin between the FIFO and LIFO cost flowassumptions.

Transcribed Image Text:

Jan. 20 Apr. 21 July 25 Sept. 19 Purchased 420 units Purchased 250 units Purchased 150 units Purchased 80 units $15 $1,200 $16 $20 $22 6,720 5,000 3,300