Question: Liberty Inc is a retailer operating in Centralia Liberty uses

Liberty Inc. is a retailer operating in Centralia. Liberty uses the perpetual inventory method. All sales returns from customers result in the goods being returned to inventory. (Assume that 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 Liberty Inc. for the month of January 2014.

(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. (Round cost per unit to three decimal places.)
(b) Compare results for the three cost flowassumptions.
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  • CreatedApril 07, 2014
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