Refer to the data for Midway Cycles in E5-19A.

Requirements 1. Compute the cost of goods sold under FIFO.

2. Compute the cost of goods sold under LIFO.

3. Which method results in the higher cost of goods sold?

5-19

Assume that Midway Cycles bought and sold a line of mountain bikes during May as follows:

Midway Cycles uses the perpetual inventory system.
Requirements 1. Compute the cost of ending inventory under FIFO.
2. Compute the cost of ending inventory under LIFO.
3. Which method results in higher cost of ending inventory?

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Date May 1 Item Quantity Unit Cost Balance. 10 $243 5 Sale 5 12 Purchase 12 $252 21 Sale 7 30 Sale 6