Assume that a JR Tire Store completed the following perpetual inventory transactions for a line of tires:
Question:
Assume that a JR Tire Store completed the following perpetual inventory transactions for a line of tires:
Beginning inventory. . . . . 16 tires @ $ 65
Purchase. . . . . . . . . . . . . . 10 tires @ $ 78
Sale. . . . . . . . . . . . . . . . . . 12 tires @ $ 90
Requirements
1. Compute cost of goods sold and gross profit using FIFO.
2. Compute cost of goods sold and gross profit using LIFO.
3. Compute cost of goods sold and gross profit using average-cost. (Round average cost per unit to the nearest cent and all other amounts to the nearest dollar.)
4. Which method results in the largest gross profit and why?
Step by Step Answer:
Reqs 1 2 and 3 FIFO LIFO AVERAGE Sales revenue 12 x 90 1080 1080 1080 Cost of goods so...View the full answer
Financial and Managerial Accounting
ISBN: 978-0132497978
3rd Edition
Authors: Horngren, Harrison, Oliver
