Fechter Inc. is a retailer operating in Dartmouth, Nova Scotia. Fechter uses the perpetual inventory method. All sales returns from customers result in the goods being returned to inventory; 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 Fechter Inc. for the month of January 2008.

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-cost.

(b) Compare results for the three cost flow assumptions.

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Unit Cost or Date Description Quantity Selling Price January 1 Beginning inventory 50 $12 January 5 Purchase 100 14 January 8 Sale 80 25 January 10 Sale return 10 25 January 15 Purchase 30 18 January 16 Purchase return 5 18 January 20 Sale 75 25 January 25 Purchase 10 20