Question

Pember Inc. is a retailer operating in Edmonton, Alberta. Pember uses the perpetual inventory method. Assume that there are no credit transactions; all amounts are settled in cash. You are provided with the following information for Pember 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 flow assumptions. Lambert Center began operations on July 1. It uses a perpetual inventory system. During July, the company had the following purchases and sales.


Instructions
(a) Determine the ending inventory under a perpetual inventory system using (1) FIFO, (2) moving-average (round unit cost to three decimal places), and (3) LIFO.
(b) Which costing method produces the highest ending inventoryvaluation?


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  • CreatedApril 07, 2014
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