Scott Sales had the following transactions for jackets in 2016
Scott Sales had the following transactions for jackets in 2016, its first year of operations:
During the year, Scott Sales sold 830 jackets for $40 each.
Required
a. Compute the amount of ending inventory Scott would report on the balance sheet, assuming the following cost flow assumptions:
(1) FIFO,
(2) LIFO, and
(3) Weighted average.
b. Record the above transactions in general journal form and post to T-accounts using
(1) FIFO,
(2) LIFO, and
(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 flow assumptions.
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