Liberty Inc. is a retailer operating in Centralia. Liberty uses the perpetual inventory method. All sales returns

Question:

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.

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. (Round cost per unit to three decimal places.)
(b) Compare results for the three cost flowassumptions.

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a Cost of goods available for sale Inventory Purchases 140 units 14 1960 January 2 120 units 15 1800 January 9 85 units 17 1445 January 23 100 units 2...View the full answer

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ISBN: 978-1118128169

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Question Posted: Apr 07, 2014 11:32 AM

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Liberty Inc. is a retailer operating in Centralia. Liberty uses the perpetual inventory method. All sales returns

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Unit Cost or Quantity Seling Price Date Description 140 120 150 85 70 100 110 $14 15 30 17 35 20 42 Ending inventory 2 Purchase Dec. 3 Sale Jan. 6 Jan. 9 Puchase Ja 10 Sale Jan. 23 Purchase Jan. 30 Sale

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a Cost of goods available for sale Inventory Purchases 140 units 14 1960 January 2 120 units 15 1800 January 9 85 units 17 1445 January 23 100 units 2...View the full answer

Accounting Tools for Business Decision Making

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