Suppose a Sams store in Kansas City, Missouri, ended May 2014 with 70,000 units of merchandise that cost an average of $7 each. Suppose the store then sold 65,000 units for $850,000 during June. Further, assume the store made two large purchases during June as follows:

Requirements
1. At June 30, the store manager needs to know the store€™s gross profit under both FIFO and LIFO. Supply this information.
2. What caused the FIFO and LIFO gross profit figures todiffer?

Transcribed Image Text:

Jun 10 10,000 units $5.10-$ 51,000 20 40,000 units $4.20-$168,000